Schools: Healthcare Facilities

Lord Laming: asked Her Majesty's Government:
	What progress they have made to ensure that the new full service extended schools have primary healthcare facilities located on site.

Lord Adonis: My Lords, the pilot full service extended schools, funded by the Department for Education and Skills since 2003, are expected to offer health and social care services to pupils and their families. The evaluation of their first year shows that most have done so successfully. The Childcare Bill will place a further duty on health authorities and PCTs to work with local authorities to improve outcomes for young children. This will provide the basis for children's centres nationwide, many of which will be on school sites.

Lord Laming: My Lords, I am most grateful to the Minister for that reply. Does he share my perception that, although most of the statutory services and many of the important voluntary organisations have responded very well to the opportunities in extended schools, the health services have been rather conspicuous by their absence? That is despite growing concerns not only about the general development of many children but about obesity, drug misuse, teenage pregnancy and so forth. Will the Minister assure the House that he will do all that he can to persuade primary care trusts to take up the opportunity afforded to them in extended schools?

Lord Adonis: My Lords, I can certainly give the noble Lord that assurance. We take the contribution of the health service and PCTs very seriously in determining how we can roll out extended schools nationwide. My department's specification for extended schools stresses seven strands of activity: childcare, health and social care, lifelong learning and family learning, parenting support, study support, sports and the arts and ICT. Health and social care is an integral part of that provision, and we are working in close partnership with the Department of Health and primary care trusts to bring that about.

Baroness Massey of Darwen: My Lords, I have always been a great fan of school nurses. How does the Minister see their role in the new arrangement?

Lord Adonis: My Lords, we see school nurses playing an important role. As my noble friend may know, the recent public health White Paper stresses the importance of nurses in schools and gives a particular commitment to providing new funding so that by 2010 every primary care trust working with children's trusts and local authorities will be resourced to have at least one full-time, year-round qualified school nurse working with each cluster or group of primary schools and their related secondary schools. The roll-out of the programme will start from the next financial year in the 20 per cent of primary care trusts with the worst health and deprivation indicators.

Baroness Walmsley: My Lords, what are the Government doing about training for professionals in schools to help them to accommodate the needs of professionals in other disciplines working on the same site? Also, what are they doing about training for head teachers in the much more complex management requirements of extended schools?

Lord Adonis: My Lords, the National College for School Leadership, which was established five years ago, provides specific training in the areas mentioned by the noble Baroness, and part of the funding for the rollout of extended schools is to provide training.

Baroness Buscombe: My Lords, following on from the supplementary question put by the noble Lord, Lord Laming, according to recent figures, more than a third of children will be overweight by 2010. Will the Minister assure the House that the provision of good sports facilities and healthy school meals is at the top of the agenda for these packages?

Lord Adonis: My Lords, we are pursuing both those points. We have a massive programme of upgrading sports facilities in schools, including requirements for much more sporting activity. We have established the new school meals trust, which has made recommendations on nutritional standards and other elements in the provision of school meals, drinks, snacks and facilities, to see that standards are raised and obesity tackled.

Baroness Warnock: My Lords, despite the Minister's welcome promises about school nurses, many children, sometimes in large schools, have no access to a school nurse. He will probably not agree with this, but I think that the numbers that he has given are not adequate to cope, for example, with the increasing number of asthmatic children who find it difficult and for whom it is dangerous to be in school without a school nurse. Will the Minister reassure the House that the number of nurses will not be spread so thinly that they will not be able to cope with such children?

Lord Adonis: My Lords, the latest census data on the provision of school nurses show that there are 2,409 qualified nurses working in the NHS school nursing service in England, which the noble Baroness will agree is a large number. We accept that there need to be more, hence the commitments in the public health White Paper that I mentioned a few moments ago.

Lord Brooke of Sutton Mandeville: My Lords, what proportion of this increased exercise will be in team games?

Lord Adonis: My Lords, one hopes a significant proportion.

Lord Dearing: My Lords, in view of the health dimension that has been raised and thinking not only of the school but the ambient population, is there advantage in facilitating partnerships between schools and the private sector to provide advanced sporting facilities such as all-weather pitches?

Lord Adonis: My Lords, there is a good deal of such partnership, and there has been a substantial and welcome contribution from the National Lottery in this area. Local authorities also collaborate closely with schools in the provision of such facilities.

Baroness Walmsley: My Lords, given that the DfES is encouraging schools to charge parents for the services provided by extended schools, what are the Government doing to ensure that the children of unemployed or lower-paid parents are not excluded from those services?

Lord Adonis: My Lords, our charging policies are all related to ability to pay, and they are for services additional to those provided at the moment. In all areas where there are charging regimes—including childcare, which is in many ways the most central such service—we have arrangements in place to see that the charges are defrayed or eliminated entirely for poorer families.

Baroness Howe of Idlicote: My Lords, going back to the question of sporting facilities, which is clearly so important to the question of rapidly advancing obesity, can the Minister assure us that sports fields are no longer being sold off?

Lord Adonis: My Lords, the disposal of each and every playing field attached to a state school in England has to have ministerial consent. I know that because they all cross my desk. I assure the noble Baroness that there are few now, and, where they take place, they are in the context of an enhancement of the sporting facilities at the school.

Lord Mawhinney: My Lords, is it part of the Government's policy to encourage young people to understand that they have a degree of responsibility for their own health?

Lord Adonis: My Lords, yes, absolutely. In this area, as in so many others, we believe that rights and responsibilities go hand in hand.

Schools: Setting and Streaming

Baroness Buscombe: asked Her Majesty's Government:
	What measures they have introduced since 1997 to promote setting and streaming in schools.

Lord Adonis: My Lords, for primary schools, since 1998, the national literacy and numeracy frameworks have recommended that there should be in-class setting to enable pupils to be taught,
	"differentiated by ability, for a sustained period",
	in addition to whole-class setting policies. For secondary schools, we have published case studies, research and—through our national strategies and the gifted and talented programmes—guidance to schools to consider ability grouping to raise standards for all pupils.

Baroness Buscombe: My Lords, I thank the Minister for that reply. We agree with the Government's assertion that setting is essential if we are to raise standards in our schools and improve outcomes for our children. The White Paper argued that setting and streaming should be the norm for schools, but, despite that, 60 per cent of lessons are not streamed, and I cannot see where setting and streaming actually appears in the Bill. Why is it not included?

Lord Adonis: My Lords, we certainly do not believe that we should legislate to require every head teacher to follow a particular policy. As the noble Baroness will know, the statistics since 1996 show a significant increase in setting in our schools, particularly in more academic subjects, in which ability groupings make much more sense, in terms of the capacity to teach to the aptitudes of individual pupils. For example, in maths, in the first year of secondary schools, the prevalence of setting has risen from 46 per cent to 74 per cent since 1996. I think that she will agree that that is a significant advance.

Baroness Sharp of Guildford: My Lords, does the Minister agree that decisions about grouping children in schools should be made by the heads and teachers in the school, who are close to the action, and not by politicians? Does he further agree that it is odd that Her Majesty's Opposition, who are constantly telling us about the need to set schools free, are trying to impose such systems on schools?

Lord Adonis: My Lords, I leave that to a debate between the Liberal Democrats and the Conservatives; I shall not intervene on that one. However, I can assure the noble Baroness that we believe that the decision should be left to the professional judgment of head teachers, most of whom believe that it is right to have ability grouping in the main academic subjects, so that the aptitudes of individual pupils are better catered for.

Lord Northbourne: My Lords, does the Minister agree that the decision should be on the basis, not of the head teacher's opinion, but of the paramountcy of the best interests of the child?

Lord Adonis: My Lords, one hopes that there is a happy coincidence between those two things.

Lord Dearing: My Lords, in view of the danger that children moving from primary to secondary school who are well behind will be permanent drop-outs unless they get help at that critical point, will the Minister say what plans he has to implement proposals in the White Paper to increase support for such kids?

Lord Adonis: My Lords, there are a number of programmes in this area. For example, the reading recovery programme, as the noble Lord will know, provides for very small group tuition—in many cases, one-to-one tuition—for pupils who are falling behind in the early years of primary school. In respect of secondary schools, we have made provision for literacy progress units, for example, which are specifically designed for use with small groups of six to seven pupils who are falling behind in literacy. With the substantial increase in the number of teachers and teaching assistants in our schools, it is now possible to give much more individual attention to pupils than was the case in the past.

Lord Phillips of Sudbury: My Lords, does the Minister agree that effective setting provides the context in which genuine comprehensives can best deliver our universal ideals of equality for all young people and equality of opportunity?

Lord Adonis: My Lords, I agree. Indeed, the research that the department has commissioned would tend to bear that out. For instance, research by Professor Judith Ireson at the Institute of Education at the University of London, which was published in 1999, stimulated further debate. It concluded:
	"Schools are making great efforts to increase pupil attainment through innovative forms of pupil grouping. There is no doubt that these initiatives involved a great deal of work, but they also appear to have generated considerable enthusiasm amongst teachers, students and parents. All appear to be having an effect on pupil learning".
	So it is precisely to boost the standards in our schools that we are pursuing the policy.

Baroness Buscombe: My Lords, does the Minister accept that it is far better to set and stream than to put children into a classroom irrespective of their calibre and their capability—a system that has failed children for generations?

Lord Adonis: My Lords, I agree that we should make provision appropriate to the aptitudes of each child, but we must avoid being too categorical. For instance, there are many subjects, such as sport, music and others, to which a very different approach might be taken from that taken to the more academic subjects.

Baroness Howe of Idlicote: My Lords, given the importance that has already been attributed to reading abilities, would the Minister give more consideration to involving well qualified volunteers in that one-to-one helping situation, for those who are in need of such extra coaching?

Lord Adonis: My Lords, the noble Baroness makes a good point but, in my experience of visiting schools—particularly primary schools—there is a very large number of volunteers, including parents, who give generously of their time in helping pupils who are falling behind in reading to catch up. We strongly encourage that, and we believe that parents and other volunteers in schools have a great contribution to make, building on the outstanding work of teaching assistants, whose number has doubled in the past eight years.

Funeral Services

Lord Harrison: asked Her Majesty's Government:
	What assessment they have made of the rising costs of funeral services in the United Kingdom.

Lord Sainsbury of Turville: My Lords, in 2001 the Office of Fair Trading studied consumer issues in the funeral industry. It found high levels of satisfaction with the service received, and most people felt they received good value for money. The OFT drew no conclusions on price levels or competition in the sector, although it did make recommendations about the provision of information to consumers.

Lord Harrison: My Lords, given the sharp 61 per cent rise in the cost of burials and cremations, is my noble friend satisfied that the funeral services industry is competitive and transparent in the prices that it charges and in itemising the services that it makes under them? Perhaps I may refer my noble friend to the funeral service payments paid under the social fund to those in the lower income groups. Is he satisfied that those payments have kept pace with the increasing price of funerals over the past five years?

Lord Sainsbury of Turville: My Lords, I think that my noble friend is referring to a report mentioned in the Times on 18 January, which suggested that there was a 61 per cent increase between 2000 and today in the cost of a funeral. That report has not been published, so it is not possible to comment on it in detail. However, if there is any sense of anti-competitive behaviour in relation to competition law that is something for the Office of Fair Trading, whose attention should be drawn to it. Since its report, the OFT has done much work to improve issues such as transparency. As for funeral payments, the amount allowable covers the necessary costs of specified items, including burial or cremation fees, plus up to £700 for all other funeral expenses. So, to some extent, it is indexed to actual costs.

Lord Renton: My Lords, having chosen my parents very carefully and having reached the age of 97, I have to say that it would be impossible to estimate the cost of my funeral. If the Government set themselves that task, they are unlikely to be very effective or accurate.

Lord Sainsbury of Turville: My Lords, the sort of person we are talking of is one on social security payments. I am not aware that the noble Lord, Lord Renton, comes into that category. It seems to me that the level at which he pitches his funeral is a matter of choice. We are dealing here with a social problem, and the Government therefore have to make some estimate of that.

Lord Razzall: My Lords, does the Minister accept that it is not only the private sector that provides funeral services? In large areas of the country, local authorities subsidise them, particularly the crematoria. Is he aware that in certain areas there is now a view that people must decide on whether the bereaved is to be cremated or buried, because of the rocketing costs? Will the Minister press his equivalent in what used to be called the Department of the Environment—I am not sure what it is now called—to ensure that that point is taken into account in the arcane process of subsidy to local authorities?

Lord Sainsbury of Turville: My Lords, I think that the relevant department is the Office of the Deputy Prime Minister, and I will draw the noble Lord's point to its attention.

Baroness Sharples: My Lords, does the Minister agree that it is a good idea to pay some time in advance? Perhaps one would get a better deal that way.

Lord Sainsbury of Turville: My Lords, that is indeed one of the issues that the Office of Fair Trading has been considering.

The Lord Bishop of Coventry: My Lords, I think I should declare an interest. I speak as one who has taken more funerals than he cares to remember. Since the Question is about costs, does the Minister agree that the Churches and other faith communities give good value for money in the services that they offer? Not only is the fee considerably lower in the case of the established Church, compared with that charged by other authorities, it is also regulated annually by the General Synod. Does he agree that it is very good value, not simply for those reasons but because it represents not only the basic disposal of the body in a seemly manner but what we might call the after-sales service of ongoing pastoral care for the bereaved and their families?

Lord Sainsbury of Turville: My Lords, I do not really feel competent to pass judgment on the good value or otherwise of the Church of England's services, but if it is a question of whether the Church of England is to be referred to the Office of Fair Trading, I can assure the right reverend Prelate that we have no intention of doing so.

Lord Phillips of Sudbury: My Lords, is the Minister aware that he can avoid even the modest charges of the Anglican Church by being lawfully and properly buried in a hole in his own back garden?

Lord Sainsbury of Turville: My Lords, if my finances get rough in the future, I will bear that in mind.

Lord Chidgey: My Lords, I shall press the Minister on an issue of considerable concern a few years ago, namely the mis-selling of pre-paid funeral plans, which hardly fall into the category that he has just been referring to. He will recall, I am sure, that there was concern about the mis-selling of those plans to the most vulnerable; that is, the aged and infirm. Have the Government's actions to regulate those plans been successful?

Lord Sainsbury of Turville: My Lords, those were exactly the issues that the OFT's report considered. It was most concerned about the need for people to have good information at a time when they were extremely vulnerable. It has been working with the industry to produce a consumer code approval scheme with the aim of self-regulation in this area.

Lord Harrison: My Lords, I remind my noble friend that he is the Minister for the late payment directive. Burial costs are different in different parts of the country: £5,000 in London's Southgate, but £1,800 in Manchester. Will the Minister update us on the statement made by our noble friend Lady Ashton of Upholland about the consultation paper, Burial Law and Policy in the 21st Century, to which the Government were intending to respond this spring?

Lord Sainsbury of Turville: My Lords, there is considerable differentiation in cost between different parts of the country, attributed by many people to the fact that there is a difference in the cost of plots of land. I am not in a position to say when the Home Office report on burial will come out, and I will ask my noble colleague to give the noble Lord the answer to that question.

Lord Brooke of Sutton Mandeville: My Lords, has the Minister ever read The Wrong Box by Robert Louis Stevenson? If not, after today, may I commend it to him?

Lord Sainsbury of Turville: My Lords, it is delightful to get this kind of information about different parts of one's life. I will follow the noble Lord's advice on the matter.

Baroness Greengross: My Lords, is there some way the Minister could inform people or arrange that they are better informed about pre-paid funerals, which the noble Baroness, Lady Sharples, mentioned? We know that people on the lowest incomes tend to pay most for funerals proportionate to their income and that, especially now, with more people living on their own, many want to relieve their family of that burden, which is why they are going for pre-paid arrangements. If such arrangements were better known, many more might take advantage of that opportunity.

Lord Sainsbury of Turville: My Lords, I agree with the noble Baroness. That is an area where the OFT is working with consumers to provide a code. Issues like pre-payment are very relevant. The OFT also publishes on its website advice to consumers about funerals.

Kenya: Press Freedom

Lord Steel of Aikwood: asked Her Majesty's Government:
	What representations they have made to the Government of Kenya concerning last week's raids on newspaper and television premises in Kenya.

Baroness Royall of Blaisdon: My Lords, we have emphasised both privately and publicly to the Kenyan Government that we strongly condemn last week's raids on media institutions. In a statement issued on 2 March, along with 26 other nations, we made clear that this action constituted an unacceptable attack on the freedom of the media, and we call on the Government of Kenya to issue an immediate and comprehensive statement about the incident.

Lord Steel of Aikwood: My Lords, I thank the Minister very warmly for that positive reply. Does she recall a similar incident in 1992 under the previous government when printing presses were broken up, and does she therefore agree that the people of Kenya have every right to feel thoroughly disappointed with the change of government that they achieved three years ago? The government have failed on corruption, failed on constitutional reform and now failed on freedom of the press. In the light of that, does the Minister agree that, although the people of Kenya deserve our continued aid, especially in view of the current drought, the Government of Kenya certainly do not?

Baroness Royall of Blaisdon: My Lords, I well recall the incident mentioned by the noble Lord. Indeed, there was great optimism in 2002 when the new president was elected on an anti-corruption and much more open platform. Sadly, it seems as if some of those who were virulently anti-corruption and against the old days have themselves adopted the old ways. However, I feel optimistic about the situation of the Kenyan people, who are now deeply outraged and demanding change. We fully support them in their demands for change.

Lord Alton of Liverpool: My Lords, does the Minister agree that in addition to the point made by the noble Lord, Lord Steel, this represents a tragedy for Africa generally, because so many people looked at the peaceful transition from the government of Daniel arap Moi as an example of how regimes could be changed through democracy and the ballot box; and that this retrograde step will therefore reflect badly not just on Kenya but on the democratic process in Africa generally? Does she agree that it distracts from what the President himself described in his new year's message as a "national disaster"—the famine currently taking place in many parts of northern Kenya?

Baroness Royall of Blaisdon: My Lords, yes, it distracts from the terrible tragedy taking place on the Horn of Africa. However, we in the Government are not distracted, and we are working with people in the Horn of Africa to ensure that aid reaches those who most need it. Great things are happening in Africa—for example, the peaceful transition of government in Nigeria—and there is still a great attachment to freedom of speech in Kenya. So some might say that this is a tragedy, but I think that it will be dealt with properly in Kenya because the people are outraged, which is a beacon of hope.

Lord Hurd of Westwell: My Lords, the noble Baroness will remember that our previous High Commissioner, Sir Edward Clay, was brave and successful in making those points effectively on the ground. Will she assure us that his successor is being allowed and encouraged to do the same?

Baroness Royall of Blaisdon: My Lords, I give the noble Lord my total assurance that the successor is being allowed to do so. Indeed he is on the ground now. He is talking to the Government of Kenya and to people and the media. He is acting in a completely open and transparent way.

Lord Wallace of Saltaire: My Lords, we understand that the attack on the press has much to do with the endemic problem of governmental corruption and that aid goes in from outside and funds then flow back out of the country in support of the government. Are our Government and our other aid donors doing more to ensure that bank supervision and the relationship between those countries and offshore financial centres are being tightened up so that it is less easy for money simply to go into the country and out the other end through corrupt government agencies and Ministers?

Baroness Royall of Blaisdon: My Lords, I cannot give the noble Lord a categorical assurance on banking supervision. However, the Government are supporting programmes that are assisting with governance and ensuring that good governance is being undertaken in Kenya. I am confident that banking supervision will be a part of the good governance that we are supporting in trying to ensure that the situation as outlined by the noble Lord is healthier in future, so that funds that come into the country do not stream out but are well used by the people of Kenya to the advantage of the people there.

Lord Taylor of Blackburn: My Lords, does my noble friend agree that this is one of the issues for which our membership of the Commonwealth should be used and that we should use the Commonwealth to bring it home to Kenya that we are not prepared to allow it to carry on in that way?

Baroness Royall of Blaisdon: My Lords, I fully agree with my noble friend. I am sure that my colleagues in government are working with the Commonwealth and that the EU itself will be doing so to ensure that the Government of Kenya are fully apprised of our dismay at the unprecedented flagrant attack on the freedom of the press in that country.

Baroness Rawlings: My Lords, in light of John Githongo's report last month describing, as we have heard, corruption at the highest level in the Kenyan Government, what assessment have Her Majesty's Government made of the constitutional review committee that President Kibaki appointed last week and the conflicting reports regarding its salaries and allowances?

Baroness Royall of Blaisdon: My Lords, it is too early for the Government to have made that appraisal, but when they have done so I will ensure that the noble Baroness receives the appropriate information.

Lord Hamilton of Epsom: My Lords, does the Minister not agree that, as long as Africa has nothing but corrupt and incompetent governments, there is no chance of making poverty history on that continent?

Baroness Royall of Blaisdon: My Lords, there has been great progress in Africa. A lot more needs to be done to ensure that the continent flourishes economically and that there is no corruption there. It will take some time, but good things are happening in Africa at this very moment.

Baroness Whitaker: My Lords, does my noble friend agree that it can be misleading to lump Africa together as one place? There are many democracies in Africa, and their number is increasing.

Baroness Royall of Blaisdon: My Lords, I warmly welcome those words from my noble friend.

Pneumoconiosis etc. (Workers' Compensation) (Payment of Claims) (Amendment) Regulations 2006

Pension Protection Fund (Risk-based Pension Protection Levy) Regulations 2006

Social Security Benefits Up-rating Order 2006

Guaranteed Minimum Pensions Increase Order 2006

Occupational Pension Schemes (Levy Ceiling) Order 2006

Lord Hunt of Kings Heath: My Lords, I beg to move the five Motions standing in my name on the Order Paper.
	Moved, That the draft regulations and orders laid before the House on 18 and 25 January and 8 February be approved [15th, 16th and 18th Reports from the Joint Committee and 25th Report from the Merits Committee].—(Lord Hunt of Kings Heath.)

On Question, Motion agreed to.

Social Security (Contributions) (Re-rating and National Insurance Funds Payments) Order 2006

Lord McKenzie of Luton: My Lords, I beg to move the Motion standing in my name on the Order Paper.
	Moved, That the draft order laid before the House on 25 January be approved [16th Report from the Joint Committee].—(Lord McKenzie of Luton.)

On Question, Motion agreed to.

Compensation Bill [HL]

Report received.
	Clause 1 [Deterrent effect of potential liability]:

Baroness Ashton of Upholland: moved Amendment No. 1:
	Page 1, line 4, after "negligence" insert "or breach of statutory duty"

Baroness Ashton of Upholland: My Lords, in moving the amendment I shall speak also to Amendments Nos. 2 and 62.
	These amendments extend Clause 1 to breaches of statutory duty, but will apply only where those statutory duties give rise to civil liability, and where liability depends on the defendant having failed to meet a standard of care. They address concerns expressed in Grand Committee by the noble Lords, Lord Hunt of Wirral and Lord Goodhart, that if the clause applied only to claims of negligence it might create uncertainty about the approach to be taken in claims for breach of statutory duties to take reasonable care, such as those owed under the Occupiers Liability Acts of 1957 and 1984.
	As I indicated in Committee, extending the approach in Clause 1 to statutory duties across the board might change the law and cause confusion by raising the possibility of it being argued for in cases to which it might not be relevant. I also referred to the difficulties likely to be involved in creating a definitive closed list of statutory duties to which the clause would apply. It is almost inevitable that something could be missed. In addition, a closed list on the face of the Bill could not cover new statutory duties created after the Bill receives Royal Assent to which the approach in Clause 1 might be relevant. The amendments avoid such problems. They reflect the current law, and ensure that all relevant cases, but only relevant cases, are covered—those which involve consideration of a standard of care.
	It may be helpful if I give some examples. As well as cases arising under the two occupiers' liability Acts, the amendment will be relevant, for example, to the duty of care owed by a landlord in respect of repair under Section 4 of the Defective Premises Act 1972, and the duty of a highway authority to keep the highway in repair under the Highways Act 1980, for which there is no special defence in Section 58 that the authority took reasonable care to ensure that the highway was not in a dangerous condition.
	It will not extend to cases where there is an absolute statutory duty involving strict liability in the event of failure, for example the duty to build dwellings properly in Section 1 of the Defective Premises Act 1972. Nor will it extend to cases that concern what is reasonable in any context other than carelessness, such as the duty of a landlord, under the Landlord and Tenant Act 1988, to consent to a proposed transaction unless it is reasonable not to consent. Nor will it extend to cases where infringement of a right is actionable as a breach of statutory duty that does not depend on carelessness, such as the moral rights conferred upon an author or director under the Copyright, Designs and Patents Act 1988. The amendments ensure that only relevant statutory duties are caught; I am extremely grateful to noble Lords for raising this issue in Grand Committee. I believe I have fulfilled my obligation to your Lordships in bringing forward these amendments to address the concerns raised. I beg to move.

Lord Hunt of Wirral: My Lords, I warmly welcome these amendments. This will come as no surprise to the noble Baroness; as she has already indicated, amendments very close to these were in my name in Committee. I am delighted that the Government have listened. I believe that these amendments both strengthen and clarify Clause 1, better defining its intended remit. It has been a great pleasure to work with the Minister. I say "work with" because it has never been "against". We are united in our resolve and objective for the Compensation Bill. The process of seeing the Bill safely into port has been greatly enhanced by the Minister's open and consensual approach. We have not, of course, agreed on every dot and comma of the Bill, but the Minister and her outstandingly good officials have listened carefully throughout to the points raised and always responded constructively.
	I would also add—though it may not be quite so palatable—that it is a pleasure to find a Minister who changes her mind. In Committee, the noble Baroness said:
	"I cannot add it in because I believe that it would do the one thing that I am keen not to do, which is to cause confusion".—[Official Report, 15/12/05; col. GC 192]
	I very much welcome the fact that I have had the opportunity to satisfy the Minister that the amendment brings clarity, not confusion. That is why I think the Minister is an example to her colleagues; every Member of the Opposition and every Back-Bencher wishes that Ministers listened as much as the noble Baroness has done. It has also been a pleasure to listen to the interventions of the noble Lord, Lord Goodhart, and those of other colleagues and noble friends in Committee, including the noble Lords, Lord Greenway and Lord Lucas, the noble Viscount, Lord Eccles, and the noble Earl, Lord Erroll.
	As so often in the past, Grand Committee procedure has brought out the very best in our system and those who work within it. We have already improved the Bill considerably. I pay tribute to the Clerks for producing a Committee Hansard, which brings together in one volume all five stages of the Grand Committee. That has been remarkably useful and is, I hope, a precedent for what may happen in the future. Finally, I believe the Government's amendments succeed in addressing most of the substantive points raised in Committee by those of us on the Opposition Benches. There will still be some disagreement, but we really are making progress.

Lord Goodhart: My Lords, I endorse everything the noble Lord, Lord Hunt of Wirral, has said. I think the amendments introduced by the Government—not only those in this group—have enormously improved the Bill, which I think is now, subject to one or two quibbles, fit for purpose and in a state to go to the other place. I am also very grateful to the Minister for ensuring that we were able to see the draft model rules before today. I have not had a chance to go through them in detail, but then they are not really a matter for your Lordships' House. But we do at least know that the model rules have been prepared and that there is therefore a framework that can be used as a basis for the rules that will be made by the regulator. Certainly we are entirely happy with the amendments in this group.

Baroness Ashton of Upholland: My Lords, I am extremely grateful for the tremendous contribution that both noble Lords have made to the Bill. I agree with the noble Lord, Lord Hunt, about the process of Grand Committee, which enables us to work through some of the issues. I think that I fulfilled all the commitments that I gave in Grand Committee. I gave plenty of them but I think that I have fulfilled them all, as is right and proper.
	As for changing my mind, I do not think that there is anything wrong with changing your mind if you end up with a better position. As the noble Lord, Lord Hunt of Wirral, knows, previously the amendment did not quite do what was needed, but I thought very hard and talked to the noble Lord about the issues and he had a point. In view of the fact that we were all working to achieve the same end, it was absolutely right and proper that I should be prepared to say, "I've changed my mind". Perhaps, in the course of today, other noble Lords will feel the same way.

On Question, amendment agreed to.

Baroness Ashton of Upholland: moved Amendment No. 2:
	Page 1, line 5, leave out "the" and insert "a"
	On Question, amendment agreed to.

Lord Goodhart: moved Amendment No. 3:
	Leave out Clause 1.

Lord Goodhart: My Lords, this is a serious point of principle, and I think this is the only occasion on which I shall be moving something that I would regard as a point of principle. It is a fundamental matter—that is, whether Clause 1 should remain part of the Bill.
	In Grand Committee, and on Second Reading before that, I was critical of Clause 1. The Government say that Clause 1 merely restates the existing law. They say, and I agree, that the present state of the law is satisfactory. In a strong, commonsense judgment by the noble and learned Lord, Lord Hoffmann, in the case of Tomlinson v Congleton Borough Council, the Appellate Committee of your Lordships' House ruled that the borough council did not have to fence off a pond in a park in order to prevent a stupid young man diving into shallow water and breaking his neck.
	There are, of course, reports of cases where damages have been awarded to people who are the authors of their own misfortunes. It is difficult to find authentic texts for these judgments and I suspect that some of them are urban myths. Some of them are reported; some were decided before the law was clarified in the Tomlinson case; and some are simply bad decisions, which are unavoidable in any legal system.
	At best, Clause 1 is unnecessary as it merely reflects the existing law, but I believe that in fact Clause 1 is worse than that—it is positively damaging. It tries, in effect, to crystallise the existing law—something that I would expect any text book on the law of negligence to take several pages to do. The trouble is that an Act of Parliament, once enacted, is an Act of Parliament, and the courts will have to interpret Clause 1, or Section 1, as it will then be. The court will have to consider what a desirable activity is. To what extent will the fact that the activity is desirable mean that standards of care are reduced? With Clause 1, I fear that we will have a good many years of satellite litigation over the interpretation, which will lead to restrictions on the ability of the common law to develop flexibly and in line with the needs of the day.
	Clause 1 could be interpreted so as to restrict what I think most of us would regard as legitimate claims for damages. Let us take, for example, rock climbing, which most of us would regard as something adventurous and as a desirable activity for the young people who want to undertake it. It carries an inherent risk. You may, for instance, get an unpredictable rockfall or an accident that is due to nobody's carelessness. If I was a parent whose child was seriously injured in a climbing accident on a climbing course, I would be appalled if my child could not get damages if the accident was due to their being sent out with a frayed rope or under the charge of an untrained and incompetent leader. The fact that the leader may be a volunteer is no excuse for their lacking the necessary skill. It should be no defence for organisers to say, "We couldn't afford to pay for trained leaders". Maybe Clause 1 says that that is not a defence—I certainly hope that it is not—but maybe the clause will be interpreted by the court to mean that it is a defence.
	I believe that Clause 1 is useless and potentially damaging. That view is shared by the House of Commons Select Committee on Constitutional Affairs, which concluded, in paragraph 67 of its report:
	"We agree with the majority of the evidence that we have received that clause 1 to the Compensation Bill . . . is unnecessary. We have concluded that it should not be in the Bill. While it is undoubtedly well meaning, it satisfies neither those who wish to reduce risk aversion in society, nor those requiring legal certainty. It is impossible to encapsulate the law of negligence in a single sentence . . . If clause 1 were implemented, it would undoubtedly, at least in the short term, lead to an increase in costly satellite litigation to define what is a 'desirable activity'. Moreover, the wide breadth of that term (or any alternative proposed such as 'social value' or 'utility') could have unforeseen consequences, since while the Government states that it is not intended to change the law, it is likely that interested parties will seek to rely upon the clause before the courts in order to improve their shield against liability. This could result in possibly inconsistent decisions where judges try to refine further the concept of 'desirable activity'".
	I have also received a briefing from the Association of Personal Injury Lawyers, which is critical of Clause 1. You may say of that organisation, "They would say that, wouldn't they?" but I was particularly struck by one point that it makes, which seems to me to be obvious common sense. If schools, not-for-profit organisations or other promoters of desirable activities have reduced standards of care, parents are less likely to entrust their children to them and access to activities will be reduced. What will the reaction be if a child is injured as a result of the incompetence of a teacher and that child is refused damages because he or she was taking part in a "desirable activity"?
	It is widely recognised that the problem is not the law but the perception of the law. It is, of course, easier to change the law than to change the perception, but doing so does not deal with the problem. There is a real risk—and it is a risk to which I am averse—that the courts could regard themselves as bound to impose lower standards of care in cases of desirable activities as a result of Clause 1. I believe that the first time the claim of a child injured by the carelessness of a group leader is refused because of Clause 1, there will be a far bigger outcry than we get from the other side of the argument now. I beg to move.

Lord Lucas: My Lords, I entirely disagree with the amendment. Clause 1 is the heart of the Bill and the part in which I have most interest.
	The noble Lord, Lord Goodhart, was right when he said that the Bill is largely in line with the present law. Grand Committee convinced me of that. The importance of the clause is not that it changes the law but that it prevents further change to the law. Someone who is responsible for planning the provision of an activity—often looking forward many years—can say, "What I am doing fits with the law at the moment. I can be sure that the perception of the drift of liability and responsibility away from the citizen towards the providers of activities is not going to apply further in my case; and therefore I can reasonably say that this is an activity in which I wish to invest and in many cases which I wish to provide my livelihood over many years". This is a thoroughly desirable clause.
	I would like to declare an interest. I own a wood in Kent to which I allow the public access. I am conscious that people using this wood, which contains slippery and steep slopes and remnants of an old garden created by former Lord Chief Justice Jowett, could easily injure themselves. They could fall down some of the concrete constructions in the wood or some of the steep slopes. There are the ordinary dangers of access to a wood which is full of dead standing timber—as is required these days—left there to amuse the owls, woodpeckers and such. But at some stage this will fall down and if someone is underneath it will squash them. If I feel that this is something for which I am likely to find myself liable in due course, or that the law might drift in that direction when that unhappy event happens and I would be the one caught by that drift, I will let the wood go back to eight-foot brambles, which is what it was when I bought it. And there will be no question of public access without severe lacerations, which will probably discourage anyone attempting it.
	It is common sense that people should be allowed to take ordinary risks and judge for themselves the ordinary risks attendant on rock climbing. As the noble Lord said, people know that a chunk of mountain may fall off higher up, knock you on the head and do you severe injury even if you have a decent rope, a decent helmet and a proper instructor. These things happen.
	It is not that we cannot deal with the current state of the law, which is broadly fair. Nobody wants to find that the law has drifted while they were not looking and that they suddenly find themselves liable or that, in looking ahead in the provision of an activity, it is likely to drift. That results in the gradual withdrawal of facilities and people taking action to avoid the possibility of the law changing to their disadvantage.
	It is entirely right that statute should state that there is a reasonable balance and that is where we want to keep it. We do not want the uncertainties of the way in which common law might develop under pressure from the Daily Mail and Daily Express.

Lord Ackner: My Lords, I respectfully seek to support what the noble Lord, Lord Goodhart, has said—which is in forensic terms, "If it ain't broke, don't fix it".
	The statute is in wholly permissive language:
	"A court considering a claim in negligence may",
	not "must". Nothing has been made mandatory in the amendment and therefore the law can be left as it is—perfectly fluid and able to progress as it is thought fit. The removal of the amendment will in no way limit what should be taken into consideration and what should be considered relevant when it comes to construction.

Viscount Eccles: My Lords, I dissent from the opinion expressed by my noble friend Lord Lucas and support the amendment of the noble Lord, Lord Goodhart. I also play close attention to the comments of the noble and learned Lord, Lord Ackner.
	Clause 1 was discussed for more than seven hours in Grand Committee, which may give some indication of the way in which it might be discussed in the courts in the land in future—at unreasonable expense, I suggest. The reason for the length of the debate was partly the question of what the clause meant and partly an attempt to change and interpret the clause to provide legal cover for the promotion of desirable activities. Thus desirable activities would take place with greater frequency. This discussion ended in some frustration, because all the attempts to find a legal way forward were unavailing. As the Minister said to us at the time, the Bill was trying not to amend the law but to take away doubt.
	However, as the noble Lord, Lord Goodhart, said at the time—he has reminded us today—the clause might have the effect of introducing more doubt rather than removing it. At that point, several noble Lords, including me, began to conclude that Clause 1 was unhelpful.
	Without reiterating all the arguments put by the noble Lord, Lord Goodhart, I say that it seems unwise to agree a clause which would widely be expected to achieve something of legal significance when it will not do so. It is impossible to see that even clarification will be achieved. The courts will be better placed if they continue as they do today. If the clause is aimed simply at achieving some psychological effect, some shift in somebody's perception somewhere, it will not assist the courts. This clause does nothing positive and might be a hindrance to the sensible development of the law on negligence. It should not stand part.

The Earl of Erroll: My Lords, I ought to declare a slight interest as an office-bearer in the All-Party Parliamentary Group on Risk and Adventure in Society. We have had some useful discussions with the Minister between Committee and Report. We realised that, although we would like to strengthen Clause 1—I shall explain why in a moment—it would probably not be possible considering the weight of the vested interests in the legal beagles in this House, who would make sure that we failed. Therefore, all we could really hope for was a Statement from the Government on some points with which we have serious issue and where the courts have been drifting in the wrong direction. I thank the Minister for the great help which she gave us.
	I disagree entirely with the noble Lord, Lord Goodhart. I was interested by the comments of the noble and learned Lord, Lord Ackner: it is broke and it does need fixing. He convinced me that we should change "may" to "should". Unfortunately, I do not think that we would get that amendment through. We will leave it for another place to put in some of these amendments, because I know that the issue will be spoken to there.
	Some very silly judgments have occurred and a lot of publicity has been given to them. The law is misunderstood. If it is as the noble Lord, Lord Goodhart, said, it is widely misunderstood outside. It is not true that the law is understood and that it is okay.
	The lawyers have a vested interest in litigation and, even if no litigation is being entered into, in advising groups at huge expense on what they can and cannot do—it is usually "cannot"—producing many reams of paper in the process. School trips are already being cancelled. I know of several school trips to foreign parts and in this country which have been cancelled. My wife is a school governor. Her school has had to cancel trips on the advice of people in the school. They do not want to take the risk. The perception out there is that there is a risk. We know that these things are falling, and whatever statistics are produced on the other side, I am afraid that there are counter-statistics. I do not have those with me, but I am quite sure they will be produced in another place in more detail. Common law can still evolve; all we are trying to do is put a stake in the ground and say, "We think that the courts, as the legislators, have been drifting in the wrong direction. Please look at which direction you are going in, and evolve the common law in a slightly different direction, strengthening the power of the risk takers in society to be able to go out and take risks".
	I had thought about, and we discussed, tabling amendments on social utility along Australian lines, but we were advised that interpreting that in the courts could cause problems. There is a concept abroad of 100 per cent contributory negligence. Someone asked quite logically how you could be 100 per cent contributory. You can be 99.9999 recurring per cent contributory, but you cannot be 100 per cent contributory; that is logically or terminologically impossible. So that would fail. But the principle is still the same.
	At the moment, the courts ascribe very little contributory negligence to people who have done some very stupid things. Parents present with their children have sometimes overruled instructors on the ground, and have been responsible for their children's serious injury or even death, despite the instructors trying to prevent them from doing so. When you are in charge of a group of several children and a parent insists on taking their child off to do something which you have said no to, how do you stop that? You would be guilty of an assault if you physically restrained them, so what do you physically do? One has to be realistic about this.
	The courts have not been very kind to groups such as the Scouts and other voluntary groups who take people out. I was an inveterate risk taker in my youth, and never thought that I would be alive today. When someone tried to sell me a pension, I explained that I would be dead by the millennium, so there was very little point in my having one. I used to climb rocks. I have led climbs that I should not have undertaken because they were slightly beyond me. Half way up, I realised that I would be dead if I did not reach the next handhold, because I had a 60-foot fall below me and I had not put in proper protection. That is how you learn. You learn to control your twitching muscles, and you learn to go for it. For some strange reason, I have survived. At the end of the day, it was my choice. I am afraid that one does such things but, in general, most people survive; that is the most remarkable thing about it. Do not ask me why but, in many ways, fewer people get injured than should do.
	I, as a responsible parent, should say to the noble Lord, Lord Goodhart, in response to his point about the parent going out with the instructor, that not every instructor knows everything. You learn only through experience. You can be taught only so much in a classroom, but until you have been in a tricky situation yourself, you do not really know how to deal with it and how to get out of it. Parents should be responsible for choosing which level of instructor their children go with. It is ridiculous automatically to expect the best instructor in the world to be in charge, with huge experience of getting people out of difficulty, just because there is a trip on, which some group has put on. You, as a parent, should decide whether the certification of that instructor is good enough. If you want to sign your child up with a silly instructor, that is your fault, in my mind. My wife and I have just been reading our health and safety instructions for the estate. My wife must physically check the certificates of competence of the contractors who come on to the farm, and she is liable if they are not up to it. It is not only the contractors who are liable. So I do not see why parents' actions should not be considered contributory to a large extent.
	That brings me swiftly—I shall finish very soon—to the point made by the noble Lord, Lord Lucas. I had thought of tabling an amendment on this, but when I saw the amendment tabled by the noble Lord, Lord Goodhart, I realised that it could equally and easily be dealt with alongside his proposal to strike out Clause 1. Again, I do not think that it would be accepted, because it would clarify the law too much for the lawyers who want to have something to fight over. Landowners are exposed to huge amounts of liability. If, for instance, there is a fun run on your footpath and people, such as marshals, stop on it, they no longer comply with what the footpath is to be used for in law. It is the landowner's responsibility to ensure that those people move on. If some injury takes place on that land, apparently the landlord will have contributory liability. That is the advice from insurance companies. Therefore, my wife has to check the insurance of any fun run taking place on the estate. The fun runners do not believe that and recently we have had major rows because they thought that they were covered under parish council insurance, but they are not.
	In law at the moment it is not clear where a landowner's responsibility stops, even when a public footpath is being used. The burden of responsibility is ridiculous. Landlords are being forced to take a view that it may be safer not to allow such events to take place and not to have Scouts on the ground. We are having to carry out a health and safety risk assessment to decide how dangerous it is for Scouts to camp among the trees, what the risk is of them lighting a bonfire that might get out of control, and what is the risk of a branch falling. Of course, under some of the environment and forestry regulations, we may not be allowed to cut down a branch if, for instance, it has some rare flora or fauna attached to it and there may well be an order that prevents us removing a branch.
	The world becomes very complicated, which lawyers love. It is a minefield. We need protection, otherwise I am afraid that the countryside will be closed down to public access as much as possible. We must realise that. That is a result of the attitude of the noble Lord, Lord Goodhart, the noble Viscount, Lord Eccles, and the noble and learned Lord, Lord Ackner, to the situation.
	Please leave risk takers to take risks. Interestingly, recent research has discovered that those who had adrenalin pumping through their blood when they were young as a result of taking risks live longer. I would rather have a few more exciting hours or days of life that I can enjoy than a few years drooling in a wheelchair when I can do nothing. That is my attitude to life. I am also better able to deal with danger because I dealt with it when I was young, when my reactions were good and fast. I have learnt how to deal with risk. We should allow our young to develop that sense. Please do not take this terribly safe route. They are going to die anyway and you will only expose them to greater danger when they are older because they will not know how to deal with it.

Lord Hunt of Wirral: My Lords, in view of what has already been said in this debate, I must draw your Lordships' attention to my entry in the Register of Members' Interests. I am a solicitor, but for many years I was an officer of the British Youth Council and for very many years a member of the Scout Association and my father was a county commissioner for the Scouts. I mention that because I know many of these organisations strongly support Clause 1.
	The Scout Association, in what I thought was a very interesting piece of evidence to the Select Committee, said that 30,000 youngsters are on its waiting list. However, because of the fear of being sued, the number of people coming forward to be Scout leaders is comparatively small, so all those youngsters have to remain on the waiting list.
	I am sad that the Minister has not been able to attract more friends in support of Clause 1. Although I would not take to the barricades in its defence, I do not share the widely held view, as we have heard in the short debate, that the Bill would be better off without it. The Minister has always maintained that Clause 1 will not change the law. As she knows, I disagree with that. However, I agree with her that it will change perception. This discussion is really all about that. Part 1 is not necessarily about changing the law, but it certainly is about changing the manner in which people and courts behave. Even if it does not go as far as one would wish, I agree with my noble friend Lord Lucas that, at least, it takes us in the right direction.
	What do we have at the moment? There was a disagreement about whether we have a compensation culture, as we on this side believe, or whether, as the Government and other bodies have propounded, there is the perception of a compensation culture. However you term it—a blame culture or a compensation culture—any sense of a claims free-for-all inevitably sets citizen against citizen, creating a less civil and less humane society, a society where youngsters are brought up without that special vitamin that comes from risk. We have heard that from many of the organisations that have participated in the Minister's consultation.
	I therefore see Clause 1 as part of a broader campaign to restore common sense and civility to society in general and to the litigation system in particular. I recognise, of course, the words of the noble and learned Lord, Lord Ackner, whom I have always respected on these matters. He always gives me pause for thought. On considering the matter, although Clause 1 could be improved, I would hesitate before advising my noble friends to vote it out of the Bill. I believe that a number of amendments will come forward in the other place, as happened in Grand Committee, which may or may not improve the Bill.
	I do not think, however, that we should send the Bill to the other place without Clause 1—I agree that it would rather take the heart out of it. Although my noble friend Lord Eccles is aware of my views, and we had some good discussions in Committee, I rather side with the noble Earl, Lord Erroll. I do not think that this is a party-political matter, in reality, but I think that the Minister should be given the benefit of the doubt as she seeks to change perception. It would be a huge achievement if people were to look back on the Compensation Bill and say that it at least helped to restore a modicum of decency, civility and—to use a popular word of the moment—respect to society.
	Now that the government amendments, which I originally tabled in Committee, have been accepted, it would be curious were I to seek to reject the improved Clause 1. It should be accepted, not because it is perfect, but because it represents a step, however faltering it may seem to some, in the right direction.

Baroness Ashton of Upholland: My Lords, I am extremely grateful to the noble Lord, Lord Hunt, because I know that he has spent a great deal of time thinking about Clause 1 and has worked closely with me, not least in Grand Committee, as he said, discussing statutory duty, which I dealt with under the previous amendment. I hope that noble Lords who have not been party to our debate will have got a flavour of where the issue stems from. I will declare my interest as an ambassador for the Hertfordshire Guides, of which my daughter is a member. I do little for them, as they will probably tell noble Lords. It is a privilege, however, to be part of that great organisation, albeit in a small way.
	I described the Government's approach to Clause 1 to the Select Committee, which I am sorry I was not able to convince. It is an eminent committee, with an extremely good chairman, Mr Alan Beith, to whom I pay due regard. I described the issue as a bit of a see-saw for the Government. On the one hand, as the noble and learned Lord, Lord Ackner, and other noble Lords have indicated, it is not the Government's intention to change the law—it is our intention to change behaviour. On the other hand, organisations feel with great passion, as exemplified by the noble Earl, Lord Erroll, and the noble Lord, Lord Lucas, in particular, that the perception of how the courts are behaving has affected the participation of children and young people in particular in activities.
	The one thing that I cannot prove is what visits and activities never took place as a consequence of people's fear that there could be a compensation culture. That is impossible to prove. I can tell noble Lords that no school trips, to our knowledge, have been cancelled, and that lots of activities take place. As the noble Lord, Lord Hunt of Wirral, mentioned, the evidence of the Scouts is that this issue is crucial to their ability to recruit and retain those people whom they need as volunteers. It is a perception; it is a problem. When we approached it we decided that it was appropriate in law to make a declarative statement—not to change the law but to make clear what the law is. We must do that in a way that continues to allow the courts to interpret the common law and for the common law to develop as it should. I have taken the best advice I can and I am certain that this is what it will do. Indeed, when I come to respond to the Constitutional Affairs Select Committee I hope that the noble Lord, Lord Goodhart, will see that there are some misunderstandings in the report that we can deal with and will deal with formally in our reply.
	The provision seeks to recognise the position that has been put to us and to deal with it in the best possible way without changing the law in any detrimental way. I think that the noble Lord, Lord Goodhart, will accept that I would do nothing in legislation that meant that any child was less safe on any trip that might take place; nor does this provision do that. Equally, I would not wish to see children, young people or adults of any kind denied the opportunities—although I am not sure that I want to go rock climbing with the noble Earl after what he said—that the noble Earl spoke about with passion and that are so good for them.
	This provision does nothing other than send a message. As I indicated in Grand Committee, this is only a tiny part of the work that my 10 colleagues on the ministerial steering group—from nine government departments—are doing on these particular issues. The provision is simply an attempt to send a message as clearly as possible in the way that we believe is appropriate. Recognising what we have sought to achieve, I hope that noble Lords will agree that the other place should at least have the opportunity to debate and discuss this. There is a huge amount of interest, not least from the all-party group, to which I pay enormous tribute for the amount of time and energy given to me. I know that the group feels passionately that there are real concerns in the volunteer community that must be debated and addressed. For that reason, if for no other, I hope that the noble Lord, Lord Goodhart, will recognise that we have an obligation to allow the other place to do that. Most importantly, noble Lords must recognise that we are seeking, not to change the law, but to declare something that is important in our common law and to take forward opportunities, especially for young people. The clause should stand part of this Bill.

The Earl of Erroll: My Lords, before the Minister sits down, will she look at the landowners' liability at some stage because it would be useful to clarify the law on that?

Baroness Ashton of Upholland: My Lords, there will be other things later in our deliberations today. However, I also have policy responsibility for this legislation. As it goes through another place, we will continue to discuss all the issues that the noble Earl has quite rightly raised.

Lord Goodhart: My Lords, we have had an interesting debate, in which arguments have been put forward on both sides, which I respect. I am grateful for the support that I have had from the noble and learned Lord, Lord Ackner, and from the noble Viscount, Lord Eccles. The noble Lord, Lord Lucas, feared that there was a risk of a change in the law if Clause 1 was not enacted. I do not see that happening. We have had a recent, commonsense interpretation by the Appellate Committee of your Lordships' House in the Tomlinson case. Your Lordships' House is of course the highest court, whose decisions are binding on all inferior courts, and I see no likelihood whatever of that decision being changed, so I believe that there is no prospect of the law drifting. The noble Lord said that Clause 1 created certainty, but it does not. What is a desirable activity? What steps to meet a standard of care can be dispensed with in the case of a desirable activity?
	The noble Earl, Lord Erroll, said that lawyers were protecting their own business, but I am afraid that Clause 1 would provide all too much work for lawyers if it were enacted. The idea that parents should individually investigate the qualifications of instructors before allowing children to go on trips is quite unrealistic. He said, "Please leave risk takers to take risks". Yes, I entirely agree with that view, but they must be able to decide on the basis of their own judgment and knowledge what risks to take and they should not be exposed to the risk of the incompetence of others.
	The noble Lord, Lord Hunt, referred to the difficulty in getting people to become Scout leaders, but Clause 1 will in no way make that easier. The real problem here is the cost of insurance premiums. The Scouts will still have to get insurance cover for people who work with them, and insurance companies will not be persuaded that Clause 1 will in any way justify lower premiums.
	In those circumstances, this is an issue of importance. Although I recognise, in view of the attitude taken by the noble Lord, Lord Hunt, that we cannot expect to win, I would like to make our views on this clear, and test the opinion of the House.

On Question, Whether the said amendment (No. 3) shall be agreed to?
	Their Lordships divided: Contents, 55; Not-Contents, 173.

Resolved in the negative, and amendment disagreed to accordingly.

Lord Hunt of Wirral: moved Amendment No. 4:
	After Clause 1, insert the following new clause—
	"APOLOGIES, OFFERS OF TREATMENT OR OTHER REDRESS
	An apology, an offer of treatment or other redress, shall not of itself amount to an admission of negligence or breach of statutory duty."

Lord Hunt of Wirral: My Lords, we have just debated Clause 1 as being all about sending messages and trying to bring about a change of culture. In that sense, neither the Bill nor this amendment can be seen in isolation. Changes of culture do not happen overnight and, as we plough through the detail of the Bill, we should not lose sight of the bigger picture. We should ask ourselves how we think people should conduct themselves when an accident or other unfortunate event occurs.
	Time and time again, we hear the litany from those who have been on the receiving end—an apology would have been nice and it took far too long for the all-important process of rehabilitation to commence. I recall that the Minister conceded that in Grand Committee when she said that, from her experience,
	"as chair of a health authority, what people often wanted was someone to say 'I am really sorry'. That would have made a huge difference. The stress and anguish that is caused in some circumstances is to a degree relieved if someone says, 'I am really sorry'".—[Official Report, 20/12/05; col. GC283.]
	So we must ask ourselves, regardless of whether we believe that there is a compensation culture, whether there are not now in place perverse incentives that actively discourage people from doing the decent thing. I believe that there are such incentives, which is why I not only support this Bill in the broadest possible terms, but also seek to improve it substantially with the amendments that stand in my name. However, the Compensation Bill's title is apposite, and there is no doubt that, by taking the heat out of situations where there has been an injury and encouraging basic human civility, we can do a great deal to improve the way society responds to such incidents.
	Speaking as a solicitor, I have to say that the present system of claiming compensation is just too adversarial. It creates frictional cost and delay when the focus should be on making sure that all injured individuals receive what they need to get them back on their feet as soon as possible. Members of this House will have heard me speak before about rehabilitation for injured claimants, and initiatives that focus on returning to work and independent living as soon as practicable.
	Our Amendment No. 4 covers not just apologies, but also offers to make amends, offers of rehabilitation and other forms of treatment. It is important that there should not be any artificial, unnecessary or avoidable obstacles in the way of rehabilitation. That is why I propose in this amendment that such apologies and offers of rehabilitation should be promoted within this Bill, and should not be seen as admissions of liability. When we debated this concept in Committee there was broad support on all sides for the idea behind this amendment but some concern about the detail of its application. I was therefore grateful to my noble friend Lord Lucas, who suggested a way in which a substantive amendment might be drafted to address those concerns. I hope that he will feel pleased that we have adopted his proposal, and that the Minister will feel that the amendment in its current form could properly be incorporated in the Bill. This, therefore, is the Lucas amendment.
	The impetus for this Bill came from the Better Regulation Task Force, which produced a report in May 2004 entitled Better Routes to Redress, in which David Arculus and his team concluded that there was a perception of a compensation culture in this country, and something must be done about it. The report singled out the beneficial effect of an apology:
	"An apology can also go a long way. We need to move away from the situation where an apology is seen as an admittance of liability".
	When dealing with rehabilitation, the report said:
	"The case for prompt intervention through rehabilitation could not be better made. Rehabilitation was mentioned at every meeting we held as an area where more work should be done to increase its availability and uptake".
	I know that the Minister is already working with a range of stakeholders in this area; if I recall, she said that there were 10 Ministers on the working party she chairs on a number of aspects of the compensation system, and she is working particularly closely with my namesake, the noble Lord, Lord Hunt of Kings Heath. We need to ensure that there are no obstacles to quicker and greater uptake of rehabilitation. When we come to Part 2 of the Bill, we will see how adverts from claims farmers, focusing on the amount of compensation available as some sort of windfall, have brought the system into disrepute.
	The Better Regulation Task Force's report emphasises that there is everything to be said for people with genuine claims having those claims sorted out as quickly as possible. The purpose of compensation, however, should always be to try as far as possible to get people back to the position they would have been in had the accident never happened, and the best way of achieving that is to encourage appropriate and effective treatment, not as an afterthought, but as the number one priority. I beg to move.

Lord Goodhart: My Lords, I have a great deal of sympathy with the principle that the noble Lord, Lord Hunt of Wirral, is advancing in his amendment. I have some reservations about whether this is the right way of achieving that result. All of us are aware that some people, when someone treads on their toes, will say sorry. There are other people who will get into a rage as a result of an accident that is completely their own fault. Any court will be able to see that an apology is not in itself a clear admission of guilt. Nevertheless, there are some cases where an apology, or a statement made when the accident occurs, is in a form that clearly can be treated as an admission of guilt. Therefore, it would be undesirable to say that an apology cannot be taken into account as part of the evidence of whose fault it is. The court will have to use common sense in deciding whether it is or is not.
	The problem lies much more with the provision in most motor insurance policies which says that if the insured person is involved in an accident they must not apologise or do anything that could be taken in any way as being an admission of guilt. Such clauses are possibly contrary to the public interest and should not be enforced. I am therefore uncertain that this provision is appropriate for inclusion in such a form in the Bill. I await the Minister's comments with interest.

The Earl of Erroll: My Lords, I rise to strongly support the amendment. It is about perception. I agree with noble Lord, Lord Goodhart, in as much as he points out that many motor insurance policies state that one must not apologise. That has given rise to a public perception that one must not apologise in any circumstances whatever. I know that that has anecdotally extended to the medical profession and hospitals. It is simple to take one of the noble Lord's points: the distinction between an apology, "Oh gosh, I am sorry"; and, "I was not looking when I did such and such", which is a statement of possible negligence—"I turned out of that side road without looking". That matter needs a clear message.
	I know from talking to Elizabeth France, for instance, who runs Otelo, the Office of the Telecommunications Ombudsman, that many of the matters that she deals with arise because the two sides have not got round to sorting out that apologies are what is in order rather than where the blame lay for some misunderstanding. She often gets the company to give the person a £25 discount off their next bill—as she has put it, the equivalent of a bunch of flowers. That solves endless litigation, screaming, shouting and so on. An apology or recognition that there was a misunderstanding is often all that someone wants. That will often stop the matter going further, regardless of where the blame really lay. At the end of the day, many such claims are against the public purse—local authorities, the medical profession and so on. That is a cost to the taxpayer. If we can save that money, that is hugely important.
	Sending out a message like that and making it clear would solve many misunderstandings. Many people feel that the only recognition that a mistake has been made is their day in court, whereas the equivalent of a bunch of flowers would have sorted it all out in the first place. They just want recognition that a mistake was made; they do not necessarily want to bring the system down—which is what it gets escalated into now.

Lord Lucas: My Lords, the noble Lord, Lord Hunt of Wirral, was kind but entirely inaccurate to attribute this amendment to me. It has been the common cry of many tens of thousands of people for quite a long time that it should be possible to say sorry. That sentiment is expressed mostly by people who wished that other people had felt able to say sorry to them. I think that this is terribly important for three reasons. First, it is how this society should be. Saying sorry to share a person's grief and pain when you have been involved in the incident that has led to that grief and pain is a way in which we should feel able to relate to each other. It is an ordinary, proper, human expression of belonging to the same community and, in a very basic way, we should seek to encourage it.
	Secondly, it is good for the person who is said sorry to. That is an ordinary matter of personal experience in many different events. If someone says sorry to you, you feel that in some way the burden of grieving has been taken away from you personally, that there is an understanding that this has hurt you, and that there is the willingness to acknowledge that such incidents should be prevented as far as possible. I do not think that guilt comes into the word "sorry" in any way—there is no implicit admission of guilt and none should be assumed.
	Thirdly, it is extremely good for the person who says sorry. I illustrate the last two points by the experience of my young cousin's wife, who died shortly after childbirth as a result of a hospital-acquired infection which was not detected. She was sent home with the infection. It was not diagnosed by the GP and she died shortly after she returned to hospital. What hurt my cousin most was that the hospital would not say sorry. He believed—not entirely wrongly—that that meant that the hospital would never truly start to look for ways in which to ensure that such cases do not happen in future.
	It is understood and accepted that medicine is not perfect—that you cannot always spot such things, that you may mistake them for something else. There is generally an acceptance that the medical profession should not be persecuted for that, that perfection should not be assumed and that sometimes things will just happen. But the idea that you should not be said sorry to, the idea that something going wrong should not lead to that organisation openly and clearly seeking ways for that not to happen again, is terribly painful and unnecessary.
	It has clearly and formally reached that state of affairs in motor insurance, as the noble Lord, Lord Goodhart, mentioned. In my personal experience, and in frequent anecdote in medical cases, it is clear that saying sorry has been discouraged. We need to do something about that. I lay no claim to how this amendment should be worded—I am not a lawyer. I do not want to put people who have been injured in a position where their rights are diminished by any such clause. But I think that we need to move the basis on which we run this society back towards saying sorry as the usual, honest and ordinary thing to do, irrespective of fault.

Viscount Bledisloe: My Lords, I entirely agree with the noble Lord, Lord Goodhart, in applauding the idea behind the amendment, but I do not share any of his doubts about why it may not be a proper amendment as drafted. He is right to say that one of the problems is that insurance companies say that one must not apologise—although I remind him that Lord Devlin established that not only can you apologise but, if it is right, you can admit guilt, and it is contrary to public policy to say in that case, "That invalidates your insurance", because public policy is forwarded by a clear admission of blame if you are to blame.
	Be that as it may, all that this amendment says is that an apology shall not of itself amount to an admission of guilt. If you go on to say, "I am terribly sorry; I ran you over because I was busy on the telephone", then the latter half is obviously an admission of guilt. But surely the bare apology should be encouraged, as the noble Lord, Lord Lucas, said, without being an admission of guilt. Let us, equally, take the question of redress. Let us suppose that a child aged 10 with a brand new bicycle runs out in front of my car, is knocked over and the bicycle smashed. His mother says: "Poor Willy. He has been saving up for that for ages. He is terribly unhappy about it". I, being a man of adequate means, agree to buy Willy—I am not referring to the noble Lord, Lord Goodhart—a new bicycle. I do not do so because I am to blame.

Lord Goodhart: My Lords, I am very sorry to hear that the noble Viscount is not going to buy me a new bicycle.

Viscount Bledisloe: My Lords, I confess that I find it rather difficult to see the noble Lord in the particular scenario I was painting. I offer to replace the bicycle, not because I feel guilty, but because I feel sorry for Willy. Why on earth should I not do that? It promotes civilised relationships. This amendment, very happily, encourages that, without any of the harms that the noble Lord, Lord Goodhart, saw in it. I wholeheartedly support it.

Baroness Ashton of Upholland: My Lords, I must begin by saying that I am sorry. I am always sorry when I would dearly like to accept an amendment but cannot. I share the sentiments expressed by all noble Lords who have spoken. I appreciate and understand what is being sought by this amendment. I think that the noble Lord, Lord Hunt of the Wirral, will not mind my saying that I was very keen to try to find a way of accepting this amendment. The reason why I cannot became clear when I sought advice. I hesitate to say that, given all the legal expertise surrounding me, but I hope that noble Lords will appreciate that I must go to my legal advisers and see where that takes me. We went to parliamentary counsel to see whether we could accept the amendment and to confirm that the amendment would not change the law but correct the perception of what the law does.
	I have already made the case in Clause 1 for perception being an important element in all our work on compensation. Regardless of whether you believe that we have a compensation culture—and the evidence suggests per se that we do not—it is very definitely perceived that we do. It is important for governments to take perception as seriously as reality in this particular context. I sought advice on that basis. However, we were unable to produce a meaningful legislative proposition without changing the law. That is because the amendment, as it stands, begs the question of what an apology of itself is. Any doubt about what constitutes an apology, and whether it acts in any way as an admission that the maker was at fault, is a doubt about the facts and the circumstances of the particular case. It is not possible for legislation to resolve that sort of doubt except by imposing a presumption one way or the other. We believe that that runs the risk of changing the law.
	I agree that it is important to address this issue. Although I know that this may not satisfy noble Lords, I must make clear that part of the work of the ministerial group is to address all issues of the compensation culture where the Government have a role to play. The group receives representations from nine departments but 11 Ministers are members of it. I chair it and it meets regularly. The group includes my colleagues from the Department of Health, the Home Office and the Department for Work and Pensions, where my noble friend Lord Hunt of Kings Heath is working with me on rehabilitation issues. The Health and Safety Executive is able to come to talk to us.
	Our ambition is to produce opportunities right across government to address this problem wherever it arises and to support organisations, whether they be schools, voluntary organisations, local authorities or others, in resisting unfounded claims and developing strategies to deal with such claims. At the same time—I stress this—we want to make it easier and simpler for well founded claims to be dealt with. I agree wholeheartedly with what the noble Lord, Lord Hunt of Wirral, said about the need to deal with rehabilitation issues, and I know that we will talk about that further. But I believe that putting people back to where they were is absolutely the right way to approach this matter.
	Therefore, I propose to take this issue to the ministerial group. As noble Lords probably know already, we have a number of stakeholders from industry and from organisations involved in areas where this is a particular concern. We are working together to address a number of different concerns and to come up with solutions which will not necessarily be legislative—although, I hasten to add, I do not rule that out in the future—but which will tackle those concerns in the most appropriate way.
	Although the noble Viscount, Lord Bledisloe, talked about what has already been said in the courts about motor insurance policies, I think that that is also in the area of perception. People believe that if their policies say that they should not apologise, they should therefore not apologise. I agree with everything that has been said about buying Willy a bicycle—that would be good. I am sure that the noble Lord, Lord Goodhart, does ride a bicycle.

Lord Goodhart: My Lords, not for a long time.

Baroness Ashton of Upholland: My Lords, this could be the moment to return to it. The principle behind the noble Viscount's anecdote is absolutely right. Saying, "I'm sorry", even if it means, "I'm sorry I didn't see you because you just did something stupid", is as relevant as saying, "I'm sorry I didn't see you because I just did something stupid". I agree with that, but I cannot accept the amendment because my advice from parliamentary counsel is that we cannot find a way of doing it that would not alter the law, and noble Lords know that that is not what we seek to do. However, I undertake that this issue will be taken very seriously. I shall report back to your Lordships on how we propose to tackle it and how we propose to deal with the very valid and genuine concerns raised by the noble Lord, Lord Hunt of Wirral.

Viscount Bledisloe: My Lords, I find it impossible to understand, given the noble Baroness's advice, how anyone could say that you cannot distinguish between a mere apology for being the unwitting and unblameful cause of someone being hurt and an apology which contains, as well as that, an admission of guilt through saying, "I did it because I didn't see you". If the noble Baroness has had advice to that effect, would she be prepared to share it with us so that we can explain to her how misguided it appears to be?

The Earl of Erroll: My Lords, if I may intervene, the noble Baroness can probably answer the two points at the same time. I do not understand from the previous discussion why the common law cannot evolve a definition of what is an okay apology and what is not if it is in the Bill. Surely we just proceed and the courts will soon sort it out.

Baroness Ashton of Upholland: My Lords, the common law evolves all the time, and in this legislation we have tried to ensure that we do not interfere with the evolution of the common law. Certainly the courts make decisions all the time, as the noble Viscount indicated in terms of the Lord Devlin decision. The courts consider what is and what is not an apology.
	I am always delighted to share advice—in fact, I am always prepared to arrange meetings where that advice can be taken forward. I have pushed and probed on this matter because I totally accept the principle behind it. But noble Lords would not expect me to rule against the best advice that I have from parliamentary counsel that the amendment would have a potentially detrimental effect on the law.
	I take the noble Viscount's experience and knowledge extremely seriously. Perhaps, between now and Third Reading, he and I can have a conversation with parliamentary counsel and if, at the end of it, with the noble Lord, Lord Hunt, involved, it is felt that we should return to the matter, I shall be very happy to do so.

Lord Hunt of Wirral: My Lords, this has been a very good debate. Rather like the noble Viscount, Lord Bledisloe, I cannot understand how to judge whether this is the best advice. If one goes to parliamentary counsel, who drafted not the Compensation Bill but the NHS Redress Bill, which now allows the National Health Service to say sorry—

Baroness Ashton of Upholland: My Lords—

Lord Hunt of Wirral: My Lords, perhaps I may finish my point. I recall that the noble Baroness said that she would report back on the idea that was put to her in Committee about the NHS Redress Bill and I look forward to hearing further.

Baroness Ashton of Upholland: My Lords, I apologise to the noble Lord, as I had intended to refer to the NHS Redress Bill. That Bill deals with apologies after liability has been established, not before, so it was difficult to see how we could translate that across to this Bill.

Lord Hunt of Wirral: My Lords, as I understand it, the issue was explained in a way that takes it wider than that—certainly in the Chief Medical Officer's report, if I recall the wording rightly.
	In any event, I suppose that where I take issue with those who have doubts about the amendment is over their constant reference to the courts. I do not want the courts to be involved. I know that the courts can easily differentiate between an apology and an admission of liability, but we want there to be a change of attitude and perception. I certainly do not want to change the law, but I would like to change the perception that you cannot say sorry. I do not see what is wrong with that; I would like people to say sorry.
	The noble Lord, Lord Goodhart, has expressed reservations, which I can readily understand. However, I say to him that I am dealing only with perception. I suppose that he opposed Clause 1 on the ground that it could complicate the situation. I hope that what I am proposing will simplify the situation, so that cases do not have to go to court. Insurance advice would no longer be that you cannot say sorry; it would be, "Well, you can say sorry, but don't admit liability".
	The wording of the amendment—for which I pay tribute to the noble Lord, Lord Lucas, as it was his suggestion—contains the key phrase,
	"shall not of itself amount to an admission of negligence".
	I recognise that parliamentary counsel are always worried about the law of unintended consequences. I can well understand why they are, as there have always been far too many unintended consequences from legislation—like the present Government, I speak with some scars. The noble Earl spoke about sending a message. We want to send a message to people that they can say sorry.
	I am prepared to make an offer to the noble Baroness, as she made one to me and, I think, to the noble Lord, Lord Goodhart. I would like to test the opinion of the House, but I am not wedded to this wording; I am wedded to the concept of making it possible to say sorry. There may well be a need to refine the language that I am using. If we could have discussions with parliamentary counsel on a way forward, I would be very happy to accept any tidying-up changes that do not go to the fundamental concept but which perhaps improve the provision in the way that parliamentary counsel would like. I am very open to that. I am not entirely sure when Third Reading will be, although I think that it may be on 27 March. I am perfectly happy first, however, to test the principle. I feel that the principle of people saying sorry and offering redress is a very good one and I would like to know whether the House agrees. I wish to test the opinion of the House.

On Question, Whether the said amendment (No. 4) shall be agreed to?
	Their Lordships divided: Contents, 157; Not-Contents, 144.

Resolved in the affirmative, and amendment agreed to accordingly.

Lord Hunt of Wirral: moved Amendment No. 5:
	After Clause 1, insert the following new clause—
	"INTERPRETATION OF PART 1
	In considering for the purposes of this Part whether the defendant should have taken particular steps to meet a standard of care, a court shall have particular regard to whether the claimant—
	(a) entered onto land or into premises with the intention of committing an offence, or
	(b) otherwise willingly accepted a risk as his (the question whether a risk was so accepted to be decided on the same principles as in other cases in which one person owes a duty of care to another)."

Lord Hunt of Wirral: My Lords, I apologise to the Minister, but it was important for the House to express its view on the principle of the previous amendment. I am, I hope, warming to my theme of targeting changes in culture and restoring standards of decency and respect. I recognise that the Minister shares this objective; I simply reiterate that, whatever happens today, I stand by ready to discuss further with her ways in which the Bill can be improved.
	On the whole question of trespassers and their rights, I am sure that the then government had the best of intentions when they introduced the Occupiers' Liability Act 1984, which gave unlawful visitors to land a right to sue if they were injured because of negligence. I suppose I have to say that because I was a member of that government, and I know that that decision was taken following critical examination by the Law Commission and the House's Judicial Committee of the law relating to occupiers of land in the Herrington v British Railways Board case. It was recognised that, in certain circumstances, people were treated as trespassers who had visited land unlawfully but who were still being exposed to unnecessary risks. With the benefit of hindsight, perhaps we should have been a little more careful. This Act has led to burglars and other criminals believing that they have a right to sue if they are injured during the commission of an offence.
	Following the infamous Tony Martin case, the present Government took action in the Criminal Justice Act 2003 after a good deal of pressure from the Opposition. But that legislation deals only with cases in which the burglar is injured as a result of the direct act of the householder, either by assault, by deliberate injury or by depriving the claimant of his liberty. What we are talking about in this amendment is quite different. Claims have been brought by adults who trespass on land and then injure themselves. Perhaps they fall off a roof or, as in the latest high-profile case, they fall off the outside of a fire escape. These are people who are taking obvious risks and putting their own safety in jeopardy as a result.
	The Prime Minister has said repeatedly in the past couple of years that he wants society to take a different attitude to risk. He wants to replace, "I know my rights", with, "I know my responsibilities". So do I, and this amendment springs from that principle. With the passage of time, I have no hesitation in saying that that 1984 Act has ultimately brought imbalance rather than balance to the law. I use that phrase because I know that it warms the heart of the Minister, who is constantly trying to achieve balance. I now believe that we should rein back the ability of trespassers to sue for injuries sustained either when they entered on to land intending to commit a criminal offence or when they took a deliberate risk. This is of course another aspect, which we ventilated and debated at length in Grand Committee when we paid particular attention to the question of children being exposed to risk of injury. That is why our amendment preserves the rights of children, who I accept should be treated differently.
	According to the amendment, there must be an element of either an intention to commit a criminal offence or a willing acceptance of risk. Those concepts would dovetail neatly with existing law, and would restrict the application of the clause to cases involving older teenagers who were well aware that what they were doing was risky or wrong. I also emphasise that the clause which I propose in Amendment No. 5 does no more than impose on the court an obligation to have regard to such matters. So in many ways we are back to the noble Earl's point about sending messages. Cases in the past few years have shown that one cannot always rely on the lower courts in our civil system to get these matters right at the outset. Too often, the correct public policy decision is reached only in the Court of Appeal or, indeed, in our Judicial Committee. I believe that this amendment would send a clear message to the courts and to the public that certain types of behaviour should not open the door to compensation. I beg to move.

Lord Goodhart: My Lords, there was no intention in Amendments Nos. 3 and 4 to change the law. In the event, we decided that we could support the amendment of the noble Lord, Lord Hunt of Wirral, on the basis that the point will be reconsidered before Third Reading. However, this amendment is in a different category. It amends the substantive law of trespass. Although the Occupiers' Liability Act needs some change, I am a little concerned about changes of this kind being introduced without the more detailed previous consideration that they would receive if they were included in another Bill. I shall be interested to hear what the noble Baroness has to say.

The Earl of Erroll: My Lords, I now understand the reaction when I was talking about Amendment No. 3. I had not read this properly and I did not realise that it could be read, quite rightly, as protecting a landowner against people running down a footpath and so on. I entirely agree with the amendment. I believe that we should pass it and if it needs tidying up, just as with Amendment No. 4, it can be revisited behind the scenes before Third Reading.
	This is a problem of not being able to push matters harder in Grand Committee. One ends up pushing amendments harder on Report, when one should be tidying up what has happened in Committee. We should not have amendments at Third Reading, unless they are absolutely necessary for further tidying up after Report stage. Everything is being delayed a stage and the principle makes the situation dangerous. We have to push amendments on Report in case they are not brought forward at Third Reading and we know that tidying up is required as a result of discussion with parliamentary counsel.
	I believe that we should definitely pass this amendment and do some tidying up with parliamentary counsel. The amendment covers the problem of burglars injuring themselves. Although I accept that this would not cover someone deliberately setting a man trap—perhaps rightly—it would protect one against a burglar falling through a roof or some particularly stupid act, the burglar having taken a difficult route.
	Paragraph (b) covers something that I am worried about: people coming on to land and carrying out perfectly lawful activities. The only point about which we need to be careful—this may need tidying up but I think we should pass what is here first—is that we should not, for example, require a signature on a form from everyone to say that they accept the risk. Also we should not require a plethora of signs around the countryside saying, "If you run down this footpath you do so at your own risk". We should have common sense about such matters.
	Nowadays everyone complains about street furniture, saying that drivers are so distracted by a plethora of signs that they do not know what they should do, which results in accidents. Equally, if one goes into the countryside and is greeted by 101 signs at the beginning of every footpath or every possible cross-country entry to a footpath, saying, "Watch you do not get bitten by adders", or "Do not disturb the wildlife", one does so at one's own risk. By passing a sign, one is willingly accepting that it is at one's own risk but what do you do about those who cannot read? Does the sign need to be in Braille for the unsighted? The height of the sign will probably matter in case someone is in a wheelchair, as we know from the NERC Bill. We have to accept that "willingly accepted" implies a notion of common sense and that signatures on forms will not be required. With the suggestion that a statement to that effect would be wonderful, I think this is a very good amendment.

Lord Monson: My Lords, I, too, have an attraction to the amendment. As I understand it, as a non-lawyer, it would not take one back to the pre-1984 position, in so far as it would apply only to those who trespassed with a view to committing a crime. It would not cover simple trespass, whereby someone wandered on to land accidentally or without any intention of committing crime. That is desirable and, for that reason, I wholly support the amendment.

Baroness Ashton of Upholland: My Lords, I was grateful for the apology from the noble Lord, Lord Hunt of Wirral, for winning the last amendment. I, too, stand by what I said, and I accept entirely what he was seeking to achieve. If we are able to retain it within the legislation on the grounds that, as he recognises, none of us is seeking to change the law, I would be delighted. We will discuss the wording that might ensue from that at the earliest opportunity.
	As the noble Lord, Lord Goodhart, said, this amendment is different, as it takes us to a different place. Like him, I consider that if one were to alter the Occupiers' Liability Act 1984, separate legislation would be better as it would allow a fuller consideration. That is an important point, which noble Lords need to take on board.
	Let me explain why I do not wish to accept the amendment. The noble Lord, Lord Hunt of Wirral, has already indicated what we did within the Criminal Justice Act 2003, while recognising that that was about trespass—or assault as I know it as a non-lawyer—against the person. I have checked, and we can find no evidence whatever of any reported case that has found in favour of criminals in terms of negligence. I would therefore argue that the courts are doing their job extremely well. In any event, these claims seldom arise, and as noble Lords involved in the legal profession in particular will know, the courts already take into account all the circumstances of the case. A number of factors will limit the possibility of any claim by a criminal succeeding, and do so effectively, as borne out by the lack of evidence of such claims.
	For example, the courts will always take into account the reason why a trespasser was on the property, which is clearly relevant to foreseeability and the steps that it is reasonable to take to avoid a risk of injury to persons on a property. The amendment seems intended to go further in providing for the courts to take into account the intention of the trespasser. We believe, however, that the courts do that very well already. Any claim by a criminal is likely to raise the common law maxim, which I have in Latin, but which I will say in English—an action does not arise from an unjust cause. How far that maxim would remain applicable over and above the statutory provision that the amendment would make is not clear.
	In practical terms, it is also difficult to assess the intentions of the claimant and to establish whether they entered on land intending to commit an offence. Of course, if a burglar comes into one's house in the dead of night, that is clear cut; but there will be cases that are not clear cut. It is therefore important that we allow the courts to determine the matter as they currently do. We believe that the amendment could create some arbitrary outcomes. As I have indicated, the Occupiers' Liability Act 1984, were it to be looked at again, should be looked at separately. I am always willing to pass on that view to my ministerial colleagues with that responsibility. The Act provides, of course, that no duty is owed in respect of risks willingly accepted as his by the claimant. The amendment uses the same words, but for the different purpose of deciding what should be done to meet the standard of care. My second concern is therefore that this amendment might create confusion in the law, which the Government could not accept.
	Of course, the question of whether a claimant willingly accepted a risk as his is a well established principle of common law—you cannot sue for something to which you expressly agreed; again, I have the Latin version of that, and though noble Lords would like to hear it, I hesitate to try to get my Latin accent accurate. That is always taken into account by the courts when deciding any claims. If we wished to re-examine the particular statute, we should do so appropriately and not via this Bill. There is no evidence to suggest that the courts are doing anything other than considering the issues appropriately in terms of acceptance of risk and the balance to be struck between rights and responsibility. We therefore think that the amendment is unnecessary.
	Whereas I fully accept the need to deal with issues of perception, and I understand the principle of the last amendment put forward by the noble Lord, Lord Hunt of Wirral—even though I could not accept the amendment as it stood—I will now be in a slightly different position. The principle behind Clause 1 is to try to tackle the perception. This is a different case, because it is about changing the law, which is not the appropriate way to tackle this issue. I hope that the noble Lord will withdraw the amendment and allow the Government to take the matter forward on a different route if that seems appropriate.

Lord Hunt of Wirral: My Lords, I am grateful to those noble Lords who have participated in the debate on this amendment. I have come across the argument before that where one is venturing into amending previous statutes one should have a wider review. However, the Government have already taken action in the Criminal Justice Act 2003 in seeking to right a wrong. Unfortunately, it did not go far enough. This amendment would go a little further to ensure cases such as those reported—of which I am aware but the Minister does not appear to be—where a potential burglar has recovered damages after falling through a plate glass window, for example, when they had no right to be near that window at the time.
	I have taken advice and understand that a number of claims for damages have been put forward by burglars or potential burglars and those who have entered land with felonious or misdemeanour intent. Sadly, the facts of life are that those claims are being settled and paid. Often, they are nuisance claims. They are pretty frivolous and make society reasonably angry, but as the law stands they are perfectly valid claims. Therefore, there is a lacuna there which has been met in part by the Criminal Justice Act 2003. I agree with the noble Earl, Lord Erroll, and with the noble Lord, Lord Monson, that this provision has attractions because it rights what is perceived to be a wrong. This was never in our minds when I was Minister with responsibility for coal at the time of the miners' strike when the Occupiers' Liability Bill went through Parliament. My colleagues in the department did not envisage that they would be allowing people with criminal intent to recover damages.
	I hope that the Minister will accept that I am moving this amendment with the best of intentions. I am seeking to right a wrong and I hope that the House will accept the amendment. Equally, if there is a better way of addressing this lacuna I remain open to suggestions, but we have thought very carefully since Grand Committee. I have taken advice from a range of experts and we believe that this is the right way forward. Therefore, I wish to test the opinion of the House.

On Question, Whether the said amendment (No. 5) shall be agreed to?
	Their Lordships divided: Contents, 109; Not-Contents, 147.

Resolved in the negative, and amendment disagreed to accordingly.

Lord Hunt of Wirral: moved Amendment No. 6:
	After Clause 1, insert the following new clause—
	"INTERPRETATION OF PART 1 (NO. 2)
	Section 1 does not apply to claims by an employee against an employer arising out of the course of his employment."

Lord Hunt of Wirral: My Lords, I have already said that we on this side of the House support the broad concept of Clause 1, and I believe that it sends a welcome message to the courts and to society. However, there is one area of detail in Clause 1 which we are concerned will have undesirable consequences. By introducing amendments to extend the scope of Clause 1 to breach of statutory duty, the Government have given the clause its teeth, but they have also opened the door to the potential effect on most areas of employers' liability, when claims almost always involve the breach of a duty imposed either by statute or by statutory instrument.
	The law in this area is complex and has been led, in the past 15 years, by a broad impetus on workplace health and safety from Europe. The Government—and, indeed, their predecessors—have been keen to focus activity on improved health and safety in the workplace. As I have the honour to be president of the All-Party Group on Occupational Safety and Health, I am certainly fully supportive of such initiatives.
	Most injuries in the workplace are avoidable, and I am sure that all noble Lords would agree that we must do everything we can to reduce the incidence of employees being injured at work. The risk created by Clause 1, in the workplace context, is that we may be in real danger of creating a two-tier standard of health and safety. If the "desirable activity" test applies in employers' liability claims, we will in effect be saying that, where an employee has been injured—because of breach of statutory duty by the employer—the nature of the activity in which the employer is engaged may make a difference to the outcome. I know that local authorities and other public sector employers are concerned about that. They certainly do not want to be regarded as second-class employers, particularly in the field of health and safety. Those concerns are, understandably and rightly, mirrored by those of the TUC on behalf of employees.
	If Clause 1 is all about creating a more civilised society, any watering down of the rights of employees—even at a theoretical level—would be directly contrary to that message. On that basis, I beg to move.

The Earl of Erroll: My Lords, I fear that I beg to disagree with the amendment and hope that it does not go through. Clause 1, in dealing with "desirable activity" and so on, will allow people to decide when, sometimes, the Health and Safety Executive or the rules have gone completely mad. Theoretically, every accident should be avoidable—apart from acts of God—but at what cost? Sometimes, we will find that things are not happening as a result; the infrastructure will then break down because no one can afford to do anything.
	A simple example is: how many people does it take to change a light bulb? Let us imagine that it is midwinter, there is an old person who does not want to sit in the dark, and a small step-ladder is required to get up to the overhead light. The local authority sends round some people to change the light bulb. How many people do your Lordships think are needed? The answer is three, or possibly four: one person to climb up the ladder and change the bulb, another to hold the ladder steady, a third to isolate the electricity supply at the mains switch at the critical moment when the bulb is being changed—since the wiring may be faulty, it cannot be assumed to be all right—and, because the older person may be distressed at having so many people running around the flat by this point, a fourth person to counsel them on what is going on. Your Lordships may think that I jest, but that is in actual local authority guidance.
	We should think about whether we are bringing the world to a halt with excessive health and safety requirements. Not every accident is avoidable. Some things that one does will be all right 99.99 per cent of the time. To try and impose extreme costs to guard against that 0.01 per cent of the time when someone may have a mild injury in the workplace is, to me, excessive. So the test in Clause 1 is right. To completely block out when the Health and Safety Executive may be being stupid and over-the-top would be counter-productive.

Baroness Ashton of Upholland: My Lords, as we are having some changing the light-bulb analogies, I am tempted to begin with one that I have heard: how many Peers does it take to change a light-bulb? The answer is: "Change?"
	To the noble Earl, Lord Erroll, I would say that issues of interpretation surround the Health and Safety Executive. At our November conference—at a point when I am not sure whether the noble Lord, Lord Hunt of Wirral, was still with us—we discussed how the executive is sometimes used as an excuse, for other bodies' reasons. So the ministerial group wishes the Health and Safety Executive to have a chance to explain what it does and does not do. Some of the concerns often raised in that context are nothing to do with what they themselves are doing, but, either by accident or design, relate to the interpretation put on what they have said or attributed to them inappropriately. Like the noble Earl, I can think of examples where I know that to be the case, although I am not suggesting that that applies to those he raised. There is a genuine problem that we should address.

The Earl of Erroll: My Lords, I have just been reading the health and safety advice on working at heights, to help my wife with safety on her farm. As far as I can work out from that advice, you have to have someone holding the stepladder. I had not read the advice on isolation from the mains in the electrical safety section, but I believe that it is mandated in some places.

Baroness Ashton of Upholland: My Lords, I am grateful for the further explanation, but we need to be cautious of some issues. I am not suggesting that the noble Earl is being anything other than cautious about where the Health and Safety Executive is put in the blame seat for things that are actually nothing to do with it. Health and safety is a critical issue.
	I shall focus on what I think the noble Lord, Lord Hunt, is seeking: a reassurance about precisely what the law will do. I shall read these points into the record because they are important, and the noble Lord can reflect upon them for the further stage of this Bill. As the noble Lord knows, we are reflecting in Clause 1 the current law and the approach taken by the courts in cases such as Tomlinson, which has already been cited today in your Lordships' House, and was cited a great deal in Committee. The court did not rule out the possibility that the factor now reflected in Clause 1 could be relevant to claims by an employee against his or her employer, but it also makes clear that another factor that courts can also consider is the extent to which the claimant was freely and voluntarily undertaking the activity in question. One example that the courts gave was that of an employee who might have no genuine or informed choice if their work required them to take particular risks. The court in Tomlinson clearly accepted that the factor now in Clause 1 could be outweighed in the court's balancing assessment by the claimant's lack of genuine and informed choice to run the risk.
	It is important that the courts can consider the balance between these factors and the other factors involved in reaching an appropriate decision in each individual case. Clause 1 does not affect the courts' ability to do this or to reach the view that the factor in Clause 1 might be outweighed by other relevant factors. Concern has been expressed that the clause might lead to people working in one area—for example, the emergency services—being treated differently from those in other areas because one type of activity might be considered desirable while another would not. I know the noble Lord has raised that concern. That is not the case. The factor in Clause 1 is not given any greater weight than any other relevant factor, and the courts will consider all relevant points in reaching a decision. In addition, Clause 1 will not be applicable in the vast majority of cases of a claim for breach of statutory duty between an employee and his or her employer, because the statutory duties in question are strict duties and liability does not depend on whether the employer took reasonable care.
	As the noble Lord, Lord Hunt of Wirral, said, the majority of health and safety regulations in recent years derive from standards agreed at European level, and the directives setting out those standards make it quite clear that the duties they place on employees are strict duties, not duties to take reasonable care. To read those duties as involving a standard of care so that Clause 1 would apply would be inconsistent with EU law, and it is well settled that the courts wherever possible should interpret legislation consistently with European law. Our own approach is to put in the words "reasonably practical". The phrase is not within the European directive, and is not the same as a duty to take reasonable care to ensure that it is achieved. That is a fundamental difference. We also went to the Health and Safety Executive legal team to make sure that we had got this absolutely right.
	The clause does not change the law in a way that would lead to the courts treating one type of worker any differently from another, or that would disadvantage employees generally. As I have said already, it is important to recognise what Clause 1 does and does not do. It provides that courts may, not must, take into account whether particular steps that, it is argued, should have been taken to avoid the injury loss would have had a particularly adverse impact on the desirable activity. It does not require the court to take that factor into account, nor to give it any weight; still less to make it a paramount consideration. I hope that I have put on the record absolutely clearly what this clause would not do and the effect it would not have on employers and employees. The clause reflects the approach of the courts in assessing cases across a wide range of situations involving claims for negligence and breach of statutory duty, and I hope, when the noble Lord has time to reflect on this, he will feel it addresses his concerns completely. If, however, there is anything outstanding still to be said for the record, I am willing to consider that too.

Lord Hunt of Wirral: My Lords, I am grateful to the Minister for that detailed response, but as I understand it the TUC still has concerns, although the position has been explained to its members, as the Minister explained it to us this afternoon. I hope that she agrees to talk to Hugh Robertson and his colleagues at the TUC to try to explore a little further the depth of their anxieties, before the Bill goes to the other place. That would be much appreciated by the TUC.

Baroness Ashton of Upholland: My Lords, I am happy to give the undertaking that we are talking to the TUC. I will be very happy to do so.

Lord Hunt of Wirral: My Lords, I am grateful to the Minister, in particular for her reply, on which I will reflect. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Hunt of Wirral: moved Amendment No. 7:
	After Clause 1, insert the following new clause—
	"INTERPRETATION OF "CLAIM" IN PART 1
	For the purposes of this Part, "claim" means—
	(a) a claim for damages in respect of personal injury or death, and
	(b) any other claim of a kind prescribed by order of the Secretary of State."

Lord Hunt of Wirral: My Lords, the amendment is an adaptation of the amendment that I tabled in Grand Committee, where we argued that Clause 1 should properly be limited to claims for personal injury only. In the amendment we have attempted to link Clause 1 with Part 2 of the Bill, believing that there is a single purpose behind the Bill of sending an unequivocal and public message that frivolous claims and those who promote them will not be tolerated. We have therefore sought to link that provision to Part 2 by giving the Secretary of State the power to prescribe other areas of application apart from personal injury. That will also retain the flexibility that the Government are keen to keep in place. I beg to move.

Baroness Ashton of Upholland: My Lords, the difficulty I have with the amendment is that it will be more restrictive on the courts than the current law and would not help the aims of Clause 1. The factor in Clause 1 may be of relevance in other types of cases; for example, those involving damage to property. The current law enables the court to take into account the nature of an activity and the impact on it of precautions which it is argued should have been taken in any case in which it considers that to be relevant. As noble Lords know, we have reflected that provision in Clause 1. Limiting the clause to personal injury and other types of case to be specified later would represent a restriction on the present freedom of the courts to consider all the circumstances; for example, the damage resulting from a defendant's negligence may be an injury or damage to property. It could be if the negligence alleged is in driving and the car is damaged, or in running an activity in which the claimant falls and damages or loses valuable possessions. Similarly, for some breaches of statutory duty the damage suffered may be to property alone.
	The activity and the defendant's behaviour may be the same, but the court's present ability to take all the circumstances into account would be restricted. That is in a way an arbitrary restriction, which could cause confusion. Requiring specific types of claim to be prescribed by order could be cumbersome and unnecessary, and would run the risk that particular types of case where the court might want to consider the factor in Clause 1 to be relevant would not be caught.
	But the objection is more fundamental than that. The amendment runs contrary to our approach, because it would reduce the flexibility available to the courts to balance the impact of precautions against the risk involved and the nature of the activity giving rise to the risk. Reducing the scope of the court's powers in that way would deprive the clause, and the message it sends, of much of its force. In addition, it is not in accordance with the approach taken in Part 2, because they are quite different. I understand the message that the noble Lord seeks to send, and I am keen to keep sending that message, but there are other mechanisms that we wish to use to do that, not least through the work across government, as I have indicated.
	Part 2 is about bringing into regulation those things that are not currently regulated, while Clause 1 is seeking to do something different in reflecting the existing flexibility of the courts. For those reasons I am not able to accept the amendment, but as always I take on board what the noble Lord is seeking to achieve. Sending messages about frivolous and unwarranted claims is an important part of how we tackle the perception of the compensation culture. It is something that I shall be keen to work on with the noble Lord's support.

Lord Hunt of Wirral: My Lords, I am grateful to the Minister. We will continue to keep sending the same message. I am grateful to her for her comments and I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.
	Clause 2 [Provision of regulated claims management services]:

Lord Hunt of Wirral: moved Amendment No. 8:
	Page 2, line 3, at end insert—
	"( ) Where authorisation is granted to a body corporate or unincorporate, there must be one or more individuals designated as "approved persons" for the purposes of this section."

Lord Hunt of Wirral: My Lords, when we considered Part 2 in Grand Committee against the background of a general welcome for the Government's decision to regulate this area of activity we placed a great deal of emphasis on the need to consider the Financial Services Authority-style model of regulation, under which the spotlight falls firmly on an individual approved person who is then accountable for the actions of the authorised firm. That has the effect of driving behaviour at senior level. More to the point, in the world of claims farmers, which has the unfortunate reputation of companies collapsing overnight, it leaves an individual answerable, even when the company itself is no longer trading.
	That is why we seek to introduce a safeguard into the Government's proposals, so that where authorisation is granted to a limited company or some other corporate entity there is still individual accountability. While I know that the Government have moved some distance towards that model I am still concerned that the current version of the proposals falls short of that sanction. However, I want to hear not what I have to say on the amendment but what the Minister has to say, because she made extensive promises in Committee. I quote from her response to a point raised by the noble Lord, Lord Goodhart, who asked:
	"Is the noble Baroness likely to be in a position to give us an indication of who or what the regulator is going to be before the Bill leaves your Lordships' House?".
	The Minister responded:
	"Certainly. It is my ambition that by the Report stage, the noble Lord will have information about what the Government have done on the back of Mr Boleat's report; our considered view on which direction we intend to move; whether the regulator is to be a designated organisation, which it will be; what we propose in terms of the arrangements to set up the body and fund it; and, lastly, our views on where we expect the market to go and our assumptions based on that. We aim to give the noble Lord"—
	and of course, the House—
	"a clear idea of what the Government intend to do . . . I hope to achieve all that by the Report stage".—[Official Report, 16/1/06; col. GC 183-84.]
	I can hardly wait to hear what the Minister has to say. I beg to move.

Baroness Ashton of Upholland: My Lords, I have notes about the detail on the regulator, which I was going to discuss under Amendment No. 13 in the noble Lord's name because I thought it all fitted there. However, if he would like me to deal with the matter now I am happy to do so, because I am a versatile Minister, as the noble Lord will appreciate—at least, I hope he does.

Lord Hunt of Wirral: My Lords, I would not want the Minister to depart from her brief, because I know how dangerous it can be, having been on her side of the House.

Baroness Ashton of Upholland: My Lords, in this case I have to depart from my brief just to prove that it is not dangerous in my case, which is exactly what I am going to do.
	I shall deal first with the specific point that the noble Lord raised in his amendment. I am sure that the noble Lord, Lord Goodhart, will agree too that there should be individual accountability for the actions of claims management companies. It is vitally important for effective regulation. When we get to Amendment No. 35 we are confident that the requirement we are proposing to add is sufficient. Regulations will require applicant companies or partnerships to provide information about the controlling individuals—the chief executive, the directors or the partners—including information about criminal records, involvement in civil proceedings, disqualification from directorships and so on. That will ensure that only those considered suitable by the regulator can control an authorised company.
	More information is contained in the policy statement, which I know that the noble Lords, Lord Hunt and Lord Goodhart, have seen—a copy of it is in the Library. We will return to the issue on Amendment No. 35.
	While we accept that the concept of "approved persons" is well established in relation to the FSA, while specifying 27 separate controlled functions and requiring an approved person to carry out each is entirely appropriate in relation to financial services organisations, many of those are large organisations involving hundreds if not thousands of employees. I am not sure I accept that a similar scheme would be other than unnecessarily complex. We suspect that the majority of companies left in the market will be relatively modest organisations. Where companies re-invent themselves it is likely that those who are deliberately trying to evade authorisation will be directors of the company, and could probably be shown as "controlling minds", which is captured by what we have sought in the Bill.
	I know that the noble Lord, Lord Hunt, was particularly concerned about the difficulty with prosecuting the individuals who are behind companies that commit offences under the Act. An approved person regime would not help with that, so we hope that what we have done in Amendment No. 35 will achieve that, because under the approved person regime the offences apply only to unauthorised persons. If that person was an "approved person" they could be employed only by an authorised claims management company and so could not have committed the offences in any case. It does not achieve what the noble Lord wants, but we hope to convince him that we have captured the issue, because we agree with the noble Lord, and have reflected that in Amendment No. 35.
	Perhaps I may now digress from my brief. I hope that I have addressed, one way or another, all of the issues that I promised to in Grand Committee. I have spoken about the budget that the Government have put in place—£750,000 a year for two years—the ambition that this should be self-financing, which is always our ambition in relation to regulation, that I reckoned that there were presently 500 companies in the market, and I spelled out in great detail, which I shall not repeat, the assumptions that we have made that where there have been other forms of regulation, the market generally shrinks. There is no suggestion that that would not happen in this case. That has huge implications for what we do in relation to regulation, which the noble Lord, Lord Hunt, will recognise.
	I put, as I promised, copies of Mr Boleat's report on the Claims Standards Council into the Library of the House with a copy of the CSC's response. I sent personal letters to noble Lords who were particularly interested in that, not least on the Front Benches. Noble Lords will know that I only held back information that either the CSC or Mr Boleat requested, because it was commercially sensitive. Everything else is in the public domain, despite the original intention that the report should not be in the public domain. So I hope that noble Lords will feel that I made my commitment absolutely clear.
	The report is a comprehensive assessment and analysis of the current position of the Claims Standards Council and the enormous task required for the organisation to get itself into a position for me to consider it as a potential regulator. The report identified a number of key areas where the CSC would need to make demonstrably good progress or have robust plans to that effect to remain in contention for designation as a regulator. While the CSC has considerable expertise of the claims management market, I have to be sure, as noble Lords would expect me to be, that it could be an effective statutory regulator. It is a very young organisation, and if it was designated as a regulator it seems to me that it would be designated a task beyond its current capabilities or near future potential. Becoming a statutory regulator would be a big leap and would not be achieved easily. I do not believe that the CSC would be able in a quick timescale to take on the great responsibilities that statutory regulation brings with it.
	I am not seeking to criticise the CSC; far from it. It has done a remarkable job in highlighting bad practices, trying to tackle poor services and developing a starting point for model rules to be recognised by the Better Regulation Task Force as a body worth giving the chance to try to make self-regulation work. As the Constitutional Affairs Select Committee commented in its recent report:
	"Although the existing Claims Standards Council might seem a credible candidate as an organisation to be named as regulator . . . a more professional solution is required if regulation is to be effective".
	I would encourage the CSC to consider options for continuing involvement, and to continue to contribute to identifying abuses, raising standards and helping to shape the implementation of the legislation, and we need a strong trade body to provide that crucial representation for the claims management sector—a body that we can work with to ensure that regulation is applied effectively and sensibly. The CSC could provide that role, although it is up to the industry to decide.
	So we have determined that the CSC will not be the regulator on the basis of the report and the response. I hope that noble Lords who have had opportunities to look at the report will be able to see and understand what is behind that.

Lord Goodhart: My Lords, while I am pleased that the Minister is not going to appoint the Claims Standards Council, which seems to be unsuitable both in principle and on the basis of the Boleat report, can she indicate what organisation or person is likely to be appointed as the regulator and when that is likely to happen?

Baroness Ashton of Upholland: My Lords, I was only pausing in my speech. I was about to address that precise issue, because that is the second part. I am doing this now because it colours and flavours all of our discussions; I hope noble Lords will forgive me for taking a little time to do that.
	I have sought to address this in two ways. First, I am mindful of the changes that will follow, so I have short-term and longer-term visions. The reason that I must think about the longer term is that the draft Bill that will create the legal services board is expected in this Session. There are implications for the potential overview regulatory role that could be played by that body. Secondly, in the context of wider changes in relation to regulations, it may be that parties who are currently not interested will change what they do and develop competences in other areas. Without prejudice, because it is not interested at this point, the Law Society springs to mind for the future. Thirdly, the unfair commercial practices directive may also have implications for this area of work. I am also mindful of continuing changes in relation to issues of regulation.
	I have mentioned those matters, because it is important that we set up a regulatory framework. In two or three years' time, it is clear, because of what has happened to the market—if the 500 companies shrink or if other areas are to be regulated—we may need to look at a longer-term solution, too. I am thinking both short term and long term, as I hope your Lordships' House would expect of me.
	I am approaching this from two directions and work is under way to address these simultaneously and speedily, because I still have a target date of October. First, we shall look to see whether within existing regulators there is an obvious regulator that, within its abilities, competencies and interests, will be willing to take this on. Secondly, we shall look at the way in which the Secretary of State might regulate. I want to say something about how that would work, because I know that there are concerns about the Secretary of State doing that—which I am sure will be raised on other amendments tonight—and under the Bill there is that possibility.
	The elements of direct regulation would include the Secretary of State as regulator, with an individual appointed or designated with the appropriate responsibility for carrying out the regulation. There will be a non-statutory advisory committee made up of representative stakeholders—financial services, the legal profession, consumer groups, insurance and the claims sector—to oversee and advise on these arrangements. A monitoring and compliance function would be contracted out to a suitable unit, be responsible to the regulator for carrying out authorisation, monitoring, complaints, enforcement and general "back office" work. There would be a tribunal to consider appeals against decisions of the regulator, which is already catered for in later amendments.
	That would be the framework around which the Secretary of State would play the role. My noble and learned friend would not be sitting in a room trying to regulate, but he would have an overseeing function. I am looking at that option, given what I was saying earlier about the longer term and the potential changes that might take place—and we do not know, although we can guess, how the market might develop or shrink as a consequence of regulation.
	Those are the two options that I am working up. I plan to provide more information as swiftly as I can, but I hope that that gives noble Lords a clear indication of my thinking in relation to the Bill as it currently stands.
	As we go through the amendments there will be further opportunities to deal with any particular questions noble Lords may have. I hope that is what the noble Lord was looking for and that, on that basis, he will be able to withdraw the amendment.

Lord Hunt of Wirral: My Lords, before the Minister sits down, it would be helpful if she could be a little more specific about who will be the regulator. I believe that that is the question that the House was hoping to have answered. I recognise that the Minister has said who the regulator will not be and that is most helpful. I hope the Claims Standards Council will have a useful continuing role to play. I hope this Chamber can send a message that the Minister intends the regulator to be effective and independent. There are a number of proposals, which we put to the Minister in Committee, about the FSA model. I recognise that the Minister cannot yet tell us the final decision, but I hope she is prepared to consider that model.

Baroness Ashton of Upholland: Indeed, my Lords. As the noble Lord will remember, yesterday he and I met with Ivan Lewis, Treasury Minister with responsibility for the FSA. Mr Lewis gave a commitment to the noble Lord that he would look personally at the issues raised. Our contact with the FSA has been very positive. Whatever we finally decide, I am quite confident that it and Mr Lewis himself will play a significant role in helping us to get this right.
	If I were in a position to give a name, I would certainly do so. I hope I have given some confidence that we are on the road to determining which of these two options will suit best in the short and medium term. The noble Lord has played a huge part in my thinking about the consequences of future changes and how they might impact even on regulators who at this point do not feel that being able to think again is for them. I do not want to close off that opportunity. I accept my responsibility, through this Bill, to get the regulator up and running by October—even if it is in an interim form—in order that we can tackle a real problem for our consumers.

Lord Hunt of Wirral: My Lords, I am very grateful to the Minister for sharing with the House what I thought was yesterday's private meeting. I am glad that she has brought it to public notice, and I am sure that the same facility will be accorded to the noble Lord, Lord Goodhart. I took the opportunity to tell the Economic Secretary that I very much hoped that if the regulator was not to be the FSA, the FSA would give whoever is going to regulate the benefit of their expertise and experience in this area. Whoever it is to be, whether the OFT or the FSA, I believe that the Government are now listening to the representations being made. I am far more confident now than I ever was before that the Government are going to establish an independent and effective system of regulation by October. We will do everything we can to support the Government in that resolve. As part of the help, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Hunt of Wirral: moved Amendment No. 9:
	Page 2, line 7, after second "services" insert "provided to persons resident in England or Wales"

Lord Hunt of Wirral: My Lords, in Grand Committee we raised the problem of services being offered in this country by claims farmers based abroad. There was some evidence that that was happening already, with claims farmers based in Spain and South Africa targeting claims for endowment mis-selling in the UK. I know the Minister has been looking into this with the Advertising Standards Authority, which believes it can take action where the publishing media are based in England or Wales. Presumably those claims farmers who are looking to evade the system will be fully aware of that. It concerns me that recent comments on this issue have rather missed the point, focusing, for example, on whether Scotland will have a problem with claims farmers presently based in Scotland, rather than the likelihood that claims farmers now based in England and Wales will move to Scotland and continue to cause problems in England. This is a serious difficulty which I know the Minister will want to address. On that basis, I beg to move.

Lord Goodhart: My Lords, I ought to make the point I made when we debated a similar amendment in Grand Committee. While I entirely agree with the principle here, the drafting is somewhat unfortunate because it excludes the position of people not resident in England and Wales but who have a claim arising, let us say, from a road accident while they were visiting this country and who should not be excluded from the protection of this Bill.

Baroness Ashton of Upholland: My Lords, as the noble Lord pointed out, as drafted, the issue is not the residence of the client but the location of where the claim would be litigated. The amendment has the effect of restricting regulation only to claims services provided to people who are resident in England and Wales. That is not what we are seeking to do. I know what the noble Lord is driving at underneath that; it is important and we talked at some length in Grand Committee about some of the issues that the noble Lord raised. As I said then, if the company is providing any kind of claim management in England and Wales it has to be authorised to do so. If it is not authorised it commits an offence. Then the issue becomes one of enforcement. We allow the regulator to take enforcement action if a claims management company is advertising or offering claims management services but is not authorised to do so. That is the offence in Clause 9.
	If the company is based outside England and Wales, enforcement could involve extradition proceedings. That depends on whether we have an arrangement with the country concerned and whether the offence and conduct involved fall within the applicable schemes. Noble Lords will know that these exist particularly between the UK and most European countries, the Commonwealth and the USA. We would argue that extradition is clearly a last resort. The co-operation of other providers is vital in ensuring that regulation of this sector is effective in protecting consumers. A claims management company operating offshore but providing services to consumers in England and Wales would fall within the jurisdiction of English law and could be prosecuted under this Bill provided they were within the jurisdiction of our courts. This could happen either by the service provider voluntarily submitting themselves to the jurisdiction of the English courts or, as I said, by the process of extradition.
	I am interested in how some of the issues reach across the work on civil justice that we are doing with our colleagues in the European Union. This has not come up in any of the discussions that we have had but I increasingly think that it might be something that we will want to begin to raise. That is the current position. I am very mindful of what the noble Lord seeks to do and we are in discussions, as part of the work of the ministerial group, about some of these issues more widely across government. I hope that that gives the noble Lord at least the beginning of an answer for now.

Lord Hunt of Wirral: My Lords, we must certainly do everything we can to ensure that those operating offshore disreputably cannot do so. I join the Minister in that important resolve and beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Hunt of Wirral: moved Amendment No. 10:
	Page 2, line 8, at end insert "but does not include an offer, in response to a claim or potential claim, of treatment or other redress for which no payment is received or expected"

Lord Hunt of Wirral: My Lords, I hope that the noble Lord, Lord Goodhart, will forgive me for not responding to the point he raised but I sense that we ought to try to move on. It may be for the convenience of the House if, in speaking to Amendment No. 10, I indicated that in view of what the Minister said in earlier discussions I do not intend to move Amendments Nos. 12, 13, 26, 30, 48, 49, 50 and 54.
	I do, however, intend to move Amendment No. 10. This is a point that has emerged since Grand Committee, although I am indebted to my noble friend Lord Eccles for pointing out during our Grand Committee proceedings that the current definition of "claims management services" might include actions taken by those responsible for meeting the claim rather than those seeking to profit from the claim being brought. This is of particular interest to liability insurers facing personal injury claims. A number of the major insurers wish now to put greater emphasis on "mending the person". Often, speed is of the essence. If your car is damaged in a road accident, gone are the days when the insurer of the person responsible expected you to go to three different garages and obtain quotes for the repairs, submit them and then wait several weeks for the go-ahead. Instead, now you will receive a telephone call from the insurer of the person responsible, or even from one of its approved garages, to arrange to collect your vehicle and then get it back on the road as soon as possible.
	Companies are now seeking to apply the same discipline to cases where the claimant is unfortunately injured in the accident—again, with the principal aim of getting the claimant back on his feet and back in action as soon as possible. I am sure that everyone agrees that that is a positive way forward.
	I hope we also agree that it was never intended in the Bill to regulate that sort of activity. I think that we should make it clear in the Bill that there is no intention to inhibit such initiatives. Just as we must ensure that we regulate all the activities that we do want to regulate with this legislation, equally we should ensure that we do not accidentally regulate any activities that we do not want to regulate.
	The Bill is all about changing people's behaviour—about positively encouraging the kind of behaviour that we want to see and also about removing unnecessary impediments to it. On that basis, I beg to move.

Baroness Ashton of Upholland: My Lords, I am very pleased to see the liability insurance industry taking a real interest in the Bill. I do not think that the noble Lord will mind if I pay tribute to Norwich Union and the many other companies which have been involved and which have offered extremely valuable advice and support to us all.
	I have no argument with the emphasis being on "mending the person" and doing so as quickly as possible. That would be a very positive way forward. I also appreciate the efforts made by the insurance industry to be more efficient in dealing with claims, to improve customer services and to ensure that full redress is provided to genuine claimants speedily.
	The definition in Clause 2 includes actions taken by those responsible for meeting the claim. That is because the outer limits of what could be regulated need to be as wide as possible—it is my "funnel" approach—so that absolutely no loopholes are available for unscrupulous providers to exploit. However, as the noble Lord is aware, the application of regulation will be controlled by order under Clause 2, specifying the regulated areas and regulated activities, and under Clause 4 to carve out any exemptions within the regulated areas and activities.
	I have also said that I intend to draw up an exemption covering insurance companies, insurance brokers and their agents in respect of claims by their policyholders and persons for whom they had arranged insurance. That is designed to cover the normal business of insurance companies and their claims-handling agents—an activity already regulated by the Financial Services Authority.
	I have been very impressed by the keenness of insurers to capture the person injured by their policyholder and to provide a "package" of claims services, including rehabilitation—I agree with the noble Lord that that is very important—to deal with a claimant's claim without any intention of recovering the cost of that service. I am sure that that is largely driven by the motivation to get the person back to where he was before the accident. However, as the noble Lord knows, it seems that because these activities concern a third party, they are not fully regulated by the FSA.
	At this stage, irrespective of the merits or otherwise of the amendment, this is a matter that would benefit from further thought. I certainly do not wish to place in the Bill a limit on the scope of regulation but I am prepared to take away the issue and consider it in relation to the order that we will be bringing forward under this clause. I hope that that answers the noble Lord's point but in a slightly different way and that, on that basis, he will be prepared to withdraw the amendment.

Lord Hunt of Wirral: My Lords, I certainly am. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Baroness Ashton of Upholland: moved Amendment No. 11:
	Page 2, line 10, after "damage" insert "or in respect of an obligation"

Baroness Ashton of Upholland: My Lords, as noble Lords will know, I undertook to table amendments to meet the concerns of the Delegated Powers and Regulatory Reform Committee. I have also tabled amendments to address some issues that were raised by noble Lords in Grand Committee.
	I have tabled Amendment No. 11 to provide an assurance that an implied breach of covenant is covered by the definition in Clause 2(2)(c). The wide definition in relation to a claim includes a reference to,
	"relief in respect of loss or damage",
	but, to make the provision crystal clear, we have amended the clause to include a reference,
	"in respect of an obligation".
	That will ensure that claims for specific performance of an obligation—relevant in the context of claims made by tenants in housing disrepair cases—are covered. I beg to move.

On Question, amendment agreed to.
	[Amendments Nos. 12 and 13 not moved.]

Baroness Ashton of Upholland: moved Amendment No. 14:
	Page 3, line 3, leave out sub-paragraphs (i) to (iii) and insert—
	"(i) setting and monitoring standards of competence and professional conduct for persons providing regulated claims management services,
	(ii) promoting good practice by persons providing regulated claims management services, in particular in relation to the provision of information about charges and other matters to persons using or considering using the services,
	(iii) promoting practices likely to facilitate competition between different providers of regulated claims management services,"

Baroness Ashton of Upholland: My Lords, Amendment No. 14 seeks to address concerns raised in Grand Committee. The amendment replaces many of the criteria that the Secretary of State may take into account when designating a person to act as regulator. Significant concerns were raised by noble Lords that the provisions in the Bill should be made clearer in relation to his responsibility to ensure that authorised persons meet high standards of competence and professional conduct when providing regulated claims management services.
	The amendment also makes clear that the regulator will ensure that those providing regulated claims management services provide information to claimants about charges and other related matters. I think we all agree that it is vital that we deal with this as it is an area of particular concern to noble Lords. Consumers are not necessarily advised of free, alternative means of pursuing their claims, and that is not acceptable. It is a matter about which I know the noble Lords, Lord Hunt and Lord Goodhart, feel very strongly. When people are considering making a claim, they need to be able to make an informed choice about the best way forward on the basis of complete and transparent information about the options. For example, if they are pursuing a claim for a mis-sold endowment policy, they need to understand the implications of 25 per cent or more of their compensation being taken as a fee by the intermediary. That could increase the shortfall on their mortgage significantly and could be avoided if they used the free, alternative scheme available and pursued the claim directly themselves.
	We have also clarified the regulator's role in relation to competition. On that point, I undertook to seek a view from the Office of Fair Trading. Competition enforcement officials in the OFT have confirmed that they do not have a responsibility for competition in relation to any regulator designated under Clause 3. Therefore, there is a role for the designated person to ensure that any practices in relation to regulated claims management services meet competition requirements.
	I hope that the amendment meets the concerns raised by noble Lords—I am grateful to them for doing so—and that it gives the reassurance they were seeking. I beg to move.

Lord Hunt of Wirral: My Lords, the amendment draws heavily on our debates in Grand Committee and represents a substantial and extremely welcome improvement on the original draft. This phraseology is tighter and clearer and leaves no room for doubt about what will be expected of claims management companies under the new regime, so we on these Benches strongly welcome the amendment. I am grateful to Ministers for listening to our arguments and for acting on them so robustly.

Lord Goodhart: My Lords, I am very happy to endorse what the noble Lord, Lord Hunt of Wirral, has said. This is a considerable improvement to the Bill and I am most grateful to the Minister for securing the appropriate changes.

On Question, amendment agreed to.
	[Amendment No. 15 not moved.]

Viscount Eccles: moved Amendment No. 15A:
	Page 3, line 16, leave out paragraph (a).

Viscount Eccles: My Lords, in this group of amendments, I will speak, first, on the matter of directions. Clause 3(4)(a) gives the Secretary of State powers to give directions to the regulator, and the regulator must comply with them. I shall not attempt to deal with the position that would apply if the Secretary of State was, for the time being, the regulator, because I suppose that he would not be inclined to give himself directions. I wish to discover why the Secretary of State needs this power and how he intends to use it.
	According to the academic studies of their function, directions are normally included in Acts of Parliament to achieve compliance with administrative matters—often matters such as accounts and the provision of information. There is evidence that they may be intended to be available for instructions of last resort if a public body appears to the Secretary of State to be manifestly failing to meet its duty of accountability via the Secretary of State to Parliament on behalf of the people. This can be described as a reserve power, which is to be used only on rare occasions, when reasonableness has gone out of the window. However, in this case, there are some wider issues, because there is greater uncertainty about why directions might be needed.
	As the Delegated Powers and Regulatory Reform Committee said in its seventh report, a number of significant aspects of the regulatory scheme—I will not read out the list—are left to delegated legislation. We discussed the matter in Grand Committee. Although we have had some clarification this afternoon, a considerable number of points in the list remain unclear. The committee went on to say that,
	"of even greater significance is the cumulative effect of the powers in the bill as a whole, because of the lack of a sufficiently coherent policy framework in the bill itself. This means that the powers could be used in future to introduce controls which should, in our view, be the subject of the full scrutiny which a bill provides".
	The committee does not comment on the power to give directions, as directions are not, in a formal sense, secondary legislation. Although the academic studies indicate that they may be so regarded, there is in fact no parliamentary procedure in relation to them or a record in this House of directions made. All of that makes it appropriate that the Minister should tell the House why the power is needed and how she expects it to be used.
	The other amendment in the group is on a rather different point, relating to subsections (9) and (10), whereby the Secretary of State becomes the regulator. That is a fallback position, which is to be available after a Bill is enacted. However, as the Delegated Powers and Regulatory Reform Committee has told us, it is open to wide interpretation and leaves many important matters to secondary legislation. Even after what we have been told this afternoon, there is still a high degree of uncertainty and some disarray among those who consider themselves to be providers of claims management services.
	As the Minister will know from comments made in Grand Committee, I would be hesitant about putting the Government in the position of having created a profession of claims management service providers. It seems to me that there is neither a coherent market nor a level of qualification that would enable the people who are operating in that market to become a unified profession. There are complex matters to be settled in this fragmented and evolving provision of services. Decisions must be made about how prescriptive the regulation needs to be or how light the touch. Indeed, the very need for regulation is to a degree regrettable, given assurances from the Chancellor to business and in the light of the task with which the Better Regulation Executive has been charged.
	It would be helpful if, in the light of what the Minister has said this afternoon on regulation, she could tell the House that, when the October date is met, the Secretary of State will not rush into the statutory instrument programme. Rather, the period of discussion and consultation should continue and succeed in identifying as many of the trading problems as possible. As I think the earlier report recommended, existing legislation and institutions, such as the Office of Fair Trading, to which the Minister has referred, should be used wherever possible to deal with the problems.
	It seems to me that, in principle, there are two ways of going about bringing this situation under control. One is to move rapidly into an ex ante regulation system, under which you make everyone become authorised. The other way—which, given the flexibility in the Bill, could be used for a while—is to have exemptions, at least temporarily, as a lot of people are going to be exempt if I understand correctly what we have been told, and to concentrate on remedying the abuses that can be found. The approach should be, as I think the Minister has indicated, a combination of working with the industry and the CSC, to the extent that it can be helpful, and of operating within known practices for the remedying of abuses. Not the least of the thoughts that have been put to us is that, if there are nasty advertisements, well, there is an Advertising Standards Authority and a number of Acts of Parliament under which, if you are not treating the customer correctly, you can be brought to book. I beg to move.

Baroness Ashton of Upholland: My Lords, I agree with much of what the noble Viscount has said, especially in relation to the flexibility that this legislation gives us. Indeed, we have constructed it in such a way as to enable us to regulate and to move people out of regulation where appropriate. In a sense, he underlines my point about the longer term. As he rightly said, we should not rush to do things that are better catered for in other ways. That is true of the current situation, but it will also be true of an evolving situation in relation to regulation. Some of the things that I was talking about, such as unfair practices, will be relevant as we look at how this legislation will be used in the future.
	I agree wholeheartedly about the need for us to think about how best to approach the problems and to capture those whom we wish to capture within a regulatory framework that is not deeply burdensome to anyone. I believe that the framework will give a kitemark that says to consumers, "These organisations and companies are regulated, so you can have confidence in them". Therefore, I think that in some ways the legislation could be extremely helpful for the market itself. I absolutely take the points made by the noble Viscount about our thinking carefully and flexibly and keeping this under our watch so that we can change what we are doing when other things are better placed to do it or when the need goes away. I hope that he will agree—indeed, I think that he was agreeing—that the legislation provides us with that.
	Let me deal with the specific points that the amendments raise about the Secretary of State. As the noble Viscount knows, the power to issue directions is common in statutes. The provision in the Bill to issue directions is in line with the powers that will be given to the Legal Services Board. The board will have the power to step in and issue directions to front-line regulators, such as the Law Society, if there was any concern about its regulatory function. It is important in this context that the Secretary of State should have this power in his oversight role.
	It is unlikely that the Secretary of State would want to issue directions in the first instance, as Clause 3(4) also gives him the power to issue guidance and a code of practice, which he must lay before Parliament, and to require reports or information. He would want to use these powers initially and resort to issuing directions only if the designated body was not efficiently and effectively regulating the sector. He might want to use the provision to issue directions before taking the step of transferring a function from the regulator, which he can do under Clause 3(10). This would always be a last resort, as the Secretary of State would want to do everything possible to assist the body if there was any concern that it was failing.
	The noble Viscount has indicated his concern about transparency. We want to be as open as possible about any steps that the Secretary of State takes in his oversight role as regulator. If a decision is taken to issue directions, we see no reason why they should not be placed on the public record. I hope that that will reassure the noble Viscount.
	I have already discussed the current position of the regulator, to which the noble Viscount referred. We think it important to retain this provision in the Bill so that the Secretary of State has the power to regulate directly if we do not discover that the situation is better regulated by an existing regulator.
	For the reasons that I have already given—and in particular in the context of wanting to retain that flexibility and that longer-term vision of where this may go in the future—we want to retain the power to transfer functions of the regulator to the Secretary of State if for some reason the body fails in carrying out its function. We do not want that to go into a vacuum.
	The power in Clause 3(10) to transfer a function by order is subject to parliamentary scrutiny and I have already indicated can only be taken if other steps had failed to remedy the failings of the organisation. Even if the Secretary of State regulates directly, we want to retain the flexibility for him to designate a person in the future if a suitable person was identified. Taking on board what the noble Lord has said, if we are going to establish the right framework for regulation it is important that we are perfectly at ease both with transferability in this and about directions being in the public domain. I am happy to discuss how we may achieve that with the noble Viscount.
	In order to get both the short-term and longer-term established, within that transparent approach we need to retain the opportunity within the Bill to designate the Secretary of State and for him to issue direction under the circumstances that I have indicated if needs be. I hope that that has reassured the noble Lord about the approach that we will be taking and gives full recognition of the valuable points that he has made.

Viscount Eccles: My Lords, I thank the Minister for her reply. Your Lordships will be wise to read not only the reply that she has just made but also the statement she made earlier on regulation which slightly changed the rules of the road compared to the completion of the discussions in Grand Committee. In the days when I sat in the Chair in meetings and people tabled papers on the day of the meeting I always used to say that we could not take them because nobody had had a chance to think about them. We would take them later.
	I would like to make a couple of points. It would be wise to be chary of the kite-mark. I would not give it out easily because when you are a consumer accreditation is one thing but what the person does when you do business with him is what matters to you. Accreditation does not always ensure that you will get the kind of service that you are looking for. That point is well taken.
	My second point is that I accept with gratitude the description of the way in which directions might or might not be applicable in this case, but I draw the Minister's attention to the fact that they can be—and indeed are being—used in different ways by different Secretaries of State. This is an issue to which we will return if not in this context then in others. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Hunt of Wirral: moved Amendment No. 16:
	Page 3, line 20, leave out "try" and insert "take all reasonable steps"

Lord Hunt of Wirral: My Lords, the record of proceedings in Grand Committee shows that we debated an amendment to leave out the words "try to" on the basis that, if the Secretary of State was going to set targets, the regulator really ought to meet them.
	The record also shows that the Minister said,
	"I completely accept the point about 'try to' and I shall take the wording away to see whether I can find a better form of words".—[Official Report, 23/1/06; col. CG307.]
	I am sure that the Minister has taken all reasonable steps to come up with a better form of words and I offer this suggestion in the spirit of co-operation. I hope that the phrase we have now proposed meets the Minister's concern as expressed in Grand Committee that there may be situations well beyond the regulator's control which would prevent targets being met. I fully understand that point and have "tried to" address it. I beg to move.

Baroness Ashton of Upholland: My Lords, I certainly tried as well. I tried very hard to deal with this and I am grateful to the noble Lord for raising this matter again as it helps me fulfil the commitment that I made that I would look at it.
	I have done lots of things including talking to parliamentary counsel about this matter because I understand what the noble Lord is seeking to do. I would like to state for the record why we have stuck with the original wording. In the context of the principles of administrative law, requirement to try to meet targets is no less strict than a requirement to take all reasonable steps. Unless the regulator has taken all reasonable steps, he will not have tried sufficiently to satisfy his legal duty. The requirement to "try to" is also already found in the statute book and I do not want to suggest by any means that amending here somehow suggests that the duty is a weaker one in other parts of legislation. I draw the noble Lord's attention to Section 2(7) of the Civil Procedure Act 1997 or Section 10(4)(f) of the Police (Northern Ireland) Act 2003, where the same words are used.
	I did go away, I discussed this, I looked into whether there were other options because I understood the point the noble Lord was seeking to achieve. But I was convinced by parliamentary counsel that in the context of the way in which this works both in current statute and in administrative law that we had a phrase that would achieve what the noble Lord, Lord Hunt, and I both wish to achieve—that is to ensure that, failing other actions that we cannot predict, the regulator is heading towards meeting his targets.

Lord Hunt of Wirral: My Lords, I am a little confused. I had understood that the Minister was going to accept the amendment but obviously I was mis-advised. I must therefore live to fight another day. I will return to the amendment at the next stage. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.
	[Amendment No. 16A not moved.]

Baroness Ashton of Upholland: moved Amendment No. 17:
	Page 3, line 33, leave out "may" and insert "shall"

Baroness Ashton of Upholland: My Lords, I apologise for the confusion that arose in the previous amendment. We will discuss that.
	Amendment No. 17 confirms what I committed to in Grand Committee and makes it mandatory for the Secretary of State to regulate directly if he has not designated a person to regulate claims management services. We are preparing a specification for how this option will work in practice should it be needed. I have explained to noble Lords something of that in our previous conversations this evening.
	Noble Lords will know how much I enjoy debates on changing "may" to "shall", and the debate we had in Committee on this point was no exception. I do not need to add anything further except to say that this amendment underlines our desire to ensure that this sector is regulated as soon as possible. I beg to move.

Lord Hunt of Wirral: My Lords, hooray. This amendment is very welcome because it removes the last vestige of ambiguity about the intention to get a system of regulation up and running as soon as possible.
	Those noble Lords who followed these debates will be all too aware of my often re-stated belief that the long-term solution to the ills of this sector must be an arm's-length regulator who is closely allied with the FSA model of regulation. However, we all tend to live in the short term and the need for action is urgent if vulnerable people are to be protected. I therefore welcome this re-statement of the role of the Secretary of State as the regulator of last resort. The last we heard about this amendment was that the Government might accept it. I am delighted to learn that they now "shall" accept it.

On Question, Amendment agreed to.
	Clause 4 [Exemptions]:

Baroness Ashton of Upholland: moved Amendment No. 18:
	Page 3, line 42, leave out ", or enable the Regulator to provide,".

Baroness Ashton of Upholland: My Lords, I "shall" move this amendment.
	The amendment removes the role of the regulator from the exemptions provision in Clause 4 and is in part consequential on the amendments of the waiver provisions that I agreed to make in Grand Committee. We envisaged a clear role for the regulator in advising the Secretary of State of those persons or classes of persons who met the criteria for authorisation. This would have enabled him to make judgements about who fell within the broad terms of an order which described a particular class in general terms, for example advice agencies which comply with certain standards and advise the Secretary of State of those who met the criteria for exemption. The regulator will now of course fulfil this role under the waiver provisions as agreed. I beg to move.

Lord Hunt of Wirral: My Lords, we welcome the amendment. Nobody on these Benches is in favour of diluting the arms-length principle or of a general arrogation of power to Ministers, but the question of exemptions is highly sensitive and tricky. I am sure that this is a move in the right direction. This is probably now a matter for rules and regulations derived from this legislation, but I restate my hope that exemptions will as a rule be granted only to those individuals and companies that are regulated to a standard that is equivalent to, or higher than, the standards imposed by the new regulator that we are creating under the Bill.
	I know that Ministers have it in mind to exempt, inter alia, trade unions, but I hope that these powers will be used sparingly at most and that Ministers will bear in mind the conclusions of the Constitutional Affairs Select Committee in its recent report. The committee stated:
	"We do not see any benefit in that approach"—
	that is, the possibility of exempting certain types of organisation such as trade unions from regulation—
	"since all claimants should have protection and the opportunity of redress, where malpractice has occurred . . . If organisations are convinced that they already meet the necessary standards and sign up to the proposed Code of Conduct, then they should not have to incur any substantial additional costs"
	The committee concluded:
	"We would expect that trade union services would be able to comply with any regulatory regime without any difficulty".
	The Minister knows that I am not talking about bona fide trade unions, but evidence was given to the all-party group that one claims farmer had set up a trade union to take advantage of the exemption. I am still concerned about that. I hope that she will bear it in mind.

On Question, amendment agreed to.

Lord Hunt of Wirral: moved Amendment No. 19:
	Page 4, line 2, at end insert—
	"( ) Before making an order under subsection (1) in relation to a body or under subsection (2) in relation to a class of person, the Secretary of State shall have regard to the extent to which that body or class is already regulated, in respect of matters addressed by regulations under the Schedule."

Lord Hunt of Wirral: My Lords, this amendment goes back to a point that we raised in Grand Committee, where we suggested that exemptions should be granted by the Secretary of State only when the standards applied by the person to be exempted were at least as good as those the Secretary of State was creating under this Bill.
	I recognise that, now that the power to grant exemptions has quite properly been reserved to the Lord Chancellor and not to the regulator, such requirement on every individual exemption granted might be too onerous, both for the applicant and for the Secretary of State and his hard-working officials.
	However, the powers to grant exemptions apply not just to individuals but, more importantly, to specified bodies or classes of persons. It is clear that the Minister has in mind the fact that there are professional bodies whose members are already regulated to an adequate standard, and that there are service providers, such as those firms authorised by the Financial Services Authority, who are already regulated in such a way that those activities do not need to be regulated separately under this Bill.
	I fully agree that we must avoid double regulation, but I hope that the Minister will understand my concerns that there should be no gaps in the regulatory regime, so that those who are exempted en bloc, as members of professional bodies or specific classes of persons, are those who already offer perfectly adequate safeguards to consumers. I beg to move.

Baroness Ashton of Upholland: My Lords, I share the noble Lord's concern. We clearly do not want to subject individuals to double regulation where they are already regulated adequately in the provision of claims management services by their professional or other body. However, existing regulatory bodies do not necessarily regulate the provision of claims management services by their members. I emphasise that where professionals offer regulated claims management services as part of their business separately from professional practice and outside the regulatory ambit of professional bodies, they would need to be authorised. The Secretary of State would not in practice exempt those who are already regulated unless he was satisfied that they were subject to comparable standards of regulation. Any decision to exempt will be based on a reasonable and fair assessment of the business activities of that person or class.
	The legal professional bodies, including the Law Society, Bar Council and Institute of Legal Executives, are all authorised bodies for the purposes of the Courts and Legal Services Act 1990. The Secretary of State approves their rules, in consultation with an independent advisory body, the Office of Fair Trading, and the four designated judges, in relation to rights of audience and rights to conduct litigation, and so has already judged the standards of those bodies.
	In exempting a particular class, the Secretary of State would be required by ordinary public law principles to take into account relevant criteria, ignore irrelevant criteria, and give proper procedural consideration to each candidate or class of candidates for exemption. I certainly agree that we should avoid double regulation. To ensure that no regulatory gaps exist, dual regulation will in some circumstances be needed; for example, where a person or business is regulated by different regulators for different activities. I hope that answers the noble Lord's point and that he is able to withdraw his amendment.

Lord Hunt of Wirral: My Lords, it does and I am. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Baroness Ashton of Upholland: moved Amendment No. 20:
	Page 4, line 4, at end insert—
	"(3A) Section 2(1) shall not prevent the provision of regulated claims management services by a person who is established or appointed by virtue of an enactment."

Baroness Ashton of Upholland: My Lords, Amendment No. 20 will insert an exemption in the Bill which excludes from the ambit of regulation a person established or appointed under an enactment. This category includes statutory ombudsmen such as the Financial Ombudsman and the Health Services Ombudsman. It was originally our intention to exempt persons appointed by statute who provided claims management services within the definition at Clause 2. This amendment will have the effect of removing statutory office holders from the regulatory ambit in the Bill. I beg to move.

On Question, amendment agreed to.
	Clause 5 [Enforcement: offence]:

Lord Goodhart: moved Amendment No. 21:
	Page 4, line 10, leave out subsection (2).

Lord Goodhart: My Lords, Clause 5(1) makes it an offence for anyone to provide regulated claims management services unless they are authorised persons, are exempt, have the benefit of a waiver or are not acting in the course of business. Clause 5(2) gives a defence to a person who may be charged under subsection (1) if he shows that that he did not know that he was committing an offence and could not reasonably have been expected to know it.
	It is a basic principle of criminal law that ignorance of the law is no defence. That principle may, on first hearing, sound unfair, but it has worked well and it has a logical basis. It makes it more difficult to put up bogus defences which waste the time of the court and could occasionally lead to guilty people being acquitted. If someone really does not know that what he is doing is wrong, he will not be prosecuted or, if he is prosecuted, he will receive a light or nominal sentence. For example, when it becomes an offence, as it shortly will be, to smoke in a pub, a lot of people are likely not to be aware of it until after the law comes in. Some of them will be foreign visitors who have no reason to know that it is now unlawful to light a cigarette in a pub. What will happen in practice is that they will be told to put out their cigarettes and they will not be prosecuted.
	Clause 5(2) makes ignorance of the law a defence if that ignorance is reasonable. I believe that that provision is unique. In discussions earlier with the Minister and the Bill team, I said so and asked for precedents. The department produced a list of five. All of them deal with a different point. Perhaps I may be a little technical. Although ignorance of the law is no defence, in general, ignorance of the facts which make your action an offence is normally a defence, because you have to intend to carry out a criminal act to establish what we still know in Latin as mens rea.
	However, some offences are offences of strict liability; that is, someone may know the law absolutely, but does not know all facts relevant to his offence. These arise mostly in the consumer field. For example, the publication of a misleading advertisement or the sale of food unfit for human consumption is an offence, even if the person who publishes the advertisement does not know that it is misleading or the person who is selling the food does not know that it is bad. That is ignorance of the facts, not of the law.
	In some cases, statute makes ignorance of the facts a defence if the defendant did not know, and had no reason to know, that those facts existed. That applies both to publication of misleading advertisements and sale of bad food, which were the two examples given by the Bill team. All five examples fall into this category. I therefore believe that Clause 5(2) is unique and would be a bad precedent. Making ignorance of the law a defence means in principle that there could be longer hearings and loopholes. In those circumstances, I believe that it is right that Clause 5(2) should be deleted, and I beg to move.

Lord Hunt of Wirral: My Lords, the noble Lord, Lord Goodhart, may recall that I strongly supported him on this amendment in Grand Committee, when I sought to echo his concern about the apparent abandonment of the principle that ignorance of the law is no defence. The Minister frankly told us that her own instinct had been to take out this clause, but that on legal advice she had been persuaded to leave it in. She said:
	"I am happy to consider the wording. However, I have driven various people completely mad in trying to see whether we can improve it".—[Official Report, 23/1/06; col. GC 328.]
	So far, I do not think that anything has come forward that would improve it.
	The Minister will know that it is famously impossible to get two lawyers ever to agree about anything. However, I have had the benefit, as has the noble Lord, of seeing some examples from the Minister's officials of outwardly similar provisions in existing legislation. I agree with the noble Lord that there are undoubtedly other statutes in which someone can be absolved of criminal liability if they really did not know, and could not reasonably have been expected to know, that they were committing an offence. However, like the noble Lord, I think that there is a crucial distinction between the examples that I have been given and the current position in this legislation. In those examples, there is a defence of "reasonable excuse", if I can call it that, in situations where someone is caught out by the facts rather than by ignorance of the law's application to them. I shall not go into the detail of those examples, but we are talking about situations where, for instance, a person was not served with a stop notice and then went on to contravene it.
	In all the examples we have seen, the opportunity for people to argue that they did not know that they were committing an offence is very much restricted to situations where they had done everything possible to get it right, but were undone by the facts of the case. I am afraid that this clause is not currently drafted that tightly, and I can see claims farmers coming to the view that ignorance of the legal provisions could provide a defence against prosecution. None of us wants that to happen. Let me be clear: I am sympathetic to the Minister's concerns that an individual may make all the appropriate inquiries and then inadvertently commit an offence, having been misled by advice from the regulator. That is, however, a very specific situation, whereas this provision seems very broadly drawn. A reasonable defence could indeed be created, but only if the clause were suitably redrafted to create the specific defence, and only the specific defence, envisaged.
	In summary, if the wording could be amended to restrict the defence to those cases where someone had made inquiries of the regulator and could not reasonably have been expected to know that they were committing an offence, I believe I could find a way of supporting the Government's position. If the Minister is wedded to the wording, however, I fully support the position taken by the noble Lord, Lord Goodhart.

Baroness Ashton of Upholland: My Lords, the noble Lord has been very generous in understanding what we seek to do, which is to ensure, as is our responsibility, that we did not accidentally catch someone in the wake of this legislation. I was privy and party to the conversations between the parliamentary counsel and the noble Lord, Lord Goodhart, most of which I did not understand, because it was lawyer to lawyer, but which I believe gave him an opportunity to put his arguments. I consulted my noble and learned friend today because I stand by my instinct in Committee, and I accept the amendment.

Lord Goodhart: My Lords, I am extremely grateful to the Minister.

On Question, amendment agreed to.

Viscount Eccles: moved Amendment No. 21A:
	Page 4, line 17, leave out sub-paragraph (i).

Viscount Eccles: My Lords, I briefly remind the House that Her Majesty's prisons are full to overflowing, and that people are often taken to task for unfair trading. Indeed, there is a whole raft of legislation with remedies which cover these eventualities. Nevertheless, the Minister said in Grand Committee that prison sentences were needed to deal with persistent offenders. Surely it is very likely—indeed, it is almost certain—that persistent unfair trading will transgress existing legislation. I believe that the real problem will not be that the person has operated without authorisation, but will be what that person has done. Existing legislation, together with fines included in this Bill, will be an appropriate and proportionate remedy, and I do not believe that we need prison sentences. These standard prison sentences seem to be put in as a sort of reflex action, and we should give them careful thought. I beg to move.

Baroness Ashton of Upholland: My Lords, I appreciate the concern expressed by the noble Viscount, Lord Eccles, that we ensure appropriate penalties are imposed for committing the offences. We want to ensure that the penalties are sufficiently stringent to act as a deterrent to those who show a flagrant disregard of the regulatory regime. We should not underestimate the harm that can be done to consumers by disreputable claims farmers. Some of the most vulnerable people in our society are targeted and can be left seriously disadvantaged. They are talked into signing agreements that they do not understand and, in some cases, are encouraged to purchase insurance which is not appropriate for them.
	I want to reassure the noble Viscount that the penalty of imprisonment is intended only for the most serious cases; for example, where an individual repeatedly and persistently offends. Where that is the case, it is appropriate and proportionate, and is similar to the penalties imposed for contravening a prohibition under similar regulators, such as the Financial Services Authority. I hope that my explanation of the way in which we would use that penalty answers the noble Viscount's point. We want to keep the opportunity to use it for those who flagrantly and repeatedly abuse the system. I hope that the noble Viscount will feel able to withdraw his amendment on that basis.

Viscount Eccles: My Lords, I have put down the marker, and perhaps I shall put down the same marker on another occasion. But on the basis of the noble Baroness's reply, for which I thank her, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.
	Clause 6 [Enforcement: the Regulator]:

Lord Goodhart: moved Amendment No. 22:
	Page 4, line 37, leave out "institute criminal proceedings in respect" and insert "refer any information or documents to the police with a view to prosecution"

Lord Goodhart: My Lords, the amendment would transfer responsibility for prosecutions for offences under Clause 5 from the regulator to the police. Under the Bill, the regulator has two very different kinds of power. One is the power to deal with misconduct by those currently authorised to conduct claims management services. Those will be civil proceedings—the regulator will conduct a hearing, and there will be a right to appeal to the tribunal and so on—and the regulator can impose civil penalties in the form of the removal of authorisation or the imposition of conditions on authorisation. The other power is now to prosecute people who commit offences by providing claims management services while not authorised to do so.
	It seems to me that regulation by the regulator will be really quite small compared with that of most regulating bodies. Indeed, it will be far smaller than, say, regulation under the Financial Services Authority or many other regulatory powers. In those circumstances, I find it difficult to envisage that the regulator is likely to be justified in having an office that is capable of handling criminal prosecutions. Unless the purpose is different from the one that I see, it would be undesirable for the regulator to have an office that would deal with prosecutions. Surely, it would be much more cost-efficient for the regulator to be able to conduct an investigation and, if the investigation gives one reason to believe that an offence has been committed, rather than have a department in his or her own office that could conduct prosecutions, to hand over responsibility for prosecutions to the police and leave them to get on with it. I would be interested to hear from the noble Baroness how she sees prosecutions for offences under Clause 5 being carried on. I beg to move.

Baroness Ashton of Upholland: My Lords, I am grateful to the noble Lord, Lord Goodhart. This is an important regulatory function. The power to prosecute those providing regulated claims management services without the necessary authorisation is important. We must protect vulnerable people, for the reasons that noble Lords know as well as I do, and stop those companies providing misleading and inaccurate advice.
	The noble Lord will know better than I do that under common law everyone has the right to institute and to continue a criminal prosecution, provided that the right has not been limited or curtailed by statute. The DPP may take over the prosecution at any stage under Section 6(2) of the Prosecution of Offences Act 1985. The position of the regulator in that respect will be exactly the same as that of any other person. However, we have made explicit provision in the Bill to put this beyond doubt. The ability of the DPP to take over a prosecution and, if appropriate, to discontinue it, will remain unchanged.
	We do not believe that costs will be excessive. On the contrary, the power of the regulator to institute proceedings could avoid wasteful duplication of effort. The regulator will have specialist knowledge of the industry and of the circumstances underlying the offence. We believe that a prosecution could, in most circumstances, be more efficiently and effectively undertaken by the regulator. However, if the number of offences proves to be very small, it may be more cost-effective for the prosecutions to be undertaken by the Crown Prosecution Service. There is nothing in the Bill that could prevent that. In some circumstances, particularly where the offences were linked with matters outside the scope of the Bill, the regulator would be likely to hand the matter over to the Crown Prosecution Service to take action. Of course, if the regulator should prosecute, then he should seek legal advice externally, which would also keep costs to a minimum.
	An example that I suggest the noble Lord might want to look at—I should be happy to supply information to him—is the Office of the Immigration Services Commissioner (OISC), which was set up in April 2000 to regulate immigration advisers, which has to date taken action that has resulted in 44 prosecutions with 43 convictions; it has, I think, a further 11 cases pending. Its last annual report, which I am happy to give the noble Lord, sets out the work it has done in this area to stamp out illegal practices.
	We believe we have this right in the Bill. We recognise the point that the noble Lord raises, but the most effective mechanism may be to allow the regulator to do that himself, bearing in mind the points that the noble Lord has raised and those that I have made about the number of prosecutions and wanting to ensure that, where it is appropriate to hand over, we do so.

Lord Goodhart: My Lords, does the Minister have any forecast of the number of prosecutions that are likely? I would have thought that we are looking at significantly fewer than the number of prosecutions for immigration offences. Given the relatively small number of businesses and people involved in claims services management here, I would have thought that one was probably looking at single figures every year, and quite small single figures.

Baroness Ashton of Upholland: My Lords, I hope that we are looking at single figures, because the regulation will work effectively and we shall be working with organisations and companies that are doing their very best. I do not have an estimate, for obvious reasons, but the flexibility in the Bill enables the regulator to play a prominent role in prosecutions, if that is appropriate, bearing in mind their expertise. I think I also made it clear that if there is a very small number, they may work much more closely with the Crown Prosecution Service for exactly the reasons that the noble Lord has indicated.

Lord Goodhart: My Lords, I am grateful to the Minister for dealing with this amendment. I certainly have no intention of taking this matter any further. I raised it merely to get an explanation of what seemed a rather difficult and important point. My belief is that there will not be enough prosecutions to justify an in-house prosecution staff and that, in practice, it is likely to be much more cost-effective to hand it over to the Crown Prosecution Service. Plainly, we shall have to wait and see about that. Therefore, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn

Baroness Ashton of Upholland: moved Amendment No. 23:
	Page 4, line 41, leave out paragraphs (b) and (c) and insert—
	(4A) On an application by the Regulator a judge of the High Court, Circuit judge or justice of the peace may issue a warrant authorising the Regulator to enter and search premises on which a person conducts or is alleged to conduct regulated claims management business, for the purposes of investigating whether an offence has been committed under this Part.
	(4B) The Regulator may take copies of written or electronic records found on a search by virtue of subsection (4A) for a purpose specified in subsection (3)(a) or (b).
	(4C) In subsections (4) to (4B) a reference to the Regulator includes a reference to a person authorised by him in writing."

Baroness Ashton of Upholland: My Lords, in moving Amendment No. 23, I shall speak also to Amendments Nos. 25, 58, 59 and 61. They respond to concerns raised by the noble Lord, Lord Goodhart, in Grand Committee, regarding enforcement actions, specifically the power to enter and search premises of both authorised claims management companies and those suspected of undertaking regulated claims management services.
	As promised, I have given further consideration to the need to have a power in the Bill for a warrant to enter and search. It is our intention to include in regulations to be made under Clause 7 a range of safeguards that will be in line with Article 8 of the European Convention on Human Rights. The intention was to include a specific requirement for the regulator to obtain a warrant before enforcing enter-and-search powers. The amendments that I have tabled place this requirement on the face of the Bill.
	Any enforcement action must be proportionate to the need to combat offences under the Act. That, of course, includes that there is sufficient evidence to support the proposed course of action. In all cases of suspected improprieties, regulations will make it clear what steps the regulator must take to ensure that the power is not exercised arbitrarily. He will seek to work with the organisation under scrutiny, encouraging it to release information on a voluntary basis before other avenues are considered. Reasonable timetables will be set for documentary evidence to be produced, with the option of extension in exceptional circumstances; for example, where the individual under investigation is away or unavailable. Only if those steps fail or if it is suspected that evidence could be changed or destroyed would a search warrant be sought.
	Amendment No. 23 permits the regulator or person acting under his authority to apply for a warrant from a judge of the High Court, circuit judge or justice of the peace. Regulations will set out the extent of the evidence and the background circumstances necessary to support an application for a warrant. Regulations will limit the exercise of powers of entry and search by, for example, requiring that a search is undertaken at a reasonable hour, that evidence of identity is provided and that written details of any documents copied or seized during the search are given. Authority will not be given to search any residential premises unless they are also used as a business address for the authorised person.
	Amendments Nos. 58 to 61 put in place similar requirements for those already authorised when the regulator is investigating a complaint or assessing compliance with terms and conditions of authorisation. However, in that situation the regulator will already have considerable leverage in obtaining information. His records of authorisation and the rules and codes of practice that all authorised persons will be required to comply with will contain the requirement to provide documentation to such scrutiny as the regulator requires.
	Amendment No. 59 would also allow the regulator, in cases of serious misconduct, to impose conditions on, suspend or cancel a person's authorisation. I hope that these amendments and the safeguards provide the reassurance that the noble Lord was seeking. I beg to move.

Lord Goodhart: had given notice of his intention to move, as an amendment to Amendment No. 23, Amendment No. 24:
	Line 2, after "Circuit" insert "or District"

Lord Goodhart: My Lords, before I turn to Amendment No. 24, I am extremely grateful to the noble Baroness for having taken on board what I think is quite an important issue which was raised in Grand Committee. I am delighted to see that now there will have to be a judicial warrant for the entry and search powers.
	I tabled two amendments to the provision, Amendments Nos. 24 and 60, which were intended to extend the power not only to High Court judges, circuit judges and justices of the peace but also to district judges. I have, however, been notified by the Bill team that district judges who are appointed to sit in magistrates' courts—stipendiary magistrates, as we used to call them—are in fact ex officio justices of the peace. Of course, there are other district judges who are not in that position. However, I do not think that it is necessary to press that matter further. I will therefore not press or speak further to either amendment. I greatly welcome these constructive amendments.

Lord Hunt of Wirral: My Lords, I agree.

[Amendment No. 24, as an amendment to Amendment No. 23, not moved.]
	On Question, Amendment No. 23 agreed to.

Baroness Ashton of Upholland: moved Amendment No. 25:
	Page 5, line 4, leave out paragraphs (a) and (b) and insert—
	"(a) specifying matters of which a judge or justice of the peace must be satisfied, or to which he must have regard, before issuing a warrant under subsection (4A), and
	(b) regulating the exercise of a power under or by virtue of subsection (4) or (4A) (whether by restricting the circumstances in which a power may be exercised, by specifying conditions to be complied with in the exercise of a power, or otherwise)."
	On Question, amendment agreed to.
	Clause 7 [Regulations]:
	[Amendment No. 26 not moved.]
	Clause 8 [Obstructing the Regulator]:

Baroness Ashton of Upholland: moved Amendment No. 27:
	Page 5, line 19, after "if" insert "without reasonable excuse"

Baroness Ashton of Upholland: My Lords, Amendment No.27 inserts a defence into Clause 8. A person who obstructs the regulator in the exercise of his powers could be committing an offence and would be liable, if found guilty, to a fine. There may be circumstances, of course, where the regulator is unintentionally pursuing the wrong person. The amendment will provide a safeguard in those circumstances for either authorised or unauthorised persons. Our legal advice is that this is a necessary addition to the Bill to protect those persons. A reasonable excuse would include circumstances where the regulator had genuinely mistaken the person and wrongly taken steps to prosecute him. I beg to move.

Lord Hunt of Wirral: My Lords, I welcome this amendment.

On Question, amendment agreed to.

Baroness Ashton of Upholland: moved Amendment No. 28:
	After Clause 9, insert the following new clause—
	"THE CLAIMS MANAGEMENT SERVICES TRIBUNAL
	(1) There shall be a tribunal to be known as the Claims Management Services Tribunal.
	(2) The Tribunal shall be constituted as follows—
	(a) members of the Financial Services and Markets Tribunal shall also be members of the Claims Management Services Tribunal,
	(b) the President of the Financial Services and Markets Tribunal shall also act as President of the Claims Management Services Tribunal,
	(c) the Deputy President of the Financial Services and Markets Tribunal shall also act as Deputy President of the Claims Management Services Tribunal, and
	(d) the panel of chairmen of the Financial Services and Markets Tribunal shall also be the panel of chairmen of the Claims Management Services Tribunal.
	(3) An appeal or reference to the Tribunal shall be heard by a member of the panel of chairmen—
	(a) selected in accordance with arrangements made by the President, and
	(b) sitting alone or, in accordance with those arrangements, with one or two members of the lay panel;
	and a chairman who sits with one other member shall have a casting vote.
	(4) The Lord Chancellor may make rules about the proceedings of the Tribunal; and the rules—
	(a) shall include provision about timing of references and appeals,
	(b) shall include provision for the suspension of decisions of the Regulator while an appeal could be brought or is pending,
	(c) shall include provision about the making of interim orders,
	(d) shall enable the Tribunal to suspend or further suspend (wholly or partly) the effect of a decision of the Regulator,
	(e) shall permit the Regulator to apply for the termination of the suspension of a decision of his,
	(f) may include provision about evidence,
	(g) may include provision about any other matter of a kind for which rules under section 132 of the Financial Services and Markets Act 2000 (c. 8) (the Financial Services and Markets Tribunal) may make provision,
	(h) may include transitional, consequential or incidental provision,
	(i) may make provision generally or only for specified cases or circumstances,
	(j) may make different provision for different cases or circumstances,
	(k) shall be made by statutory instrument, and
	(l) shall be subject to annulment in pursuance of a resolution of either House of Parliament.
	(5) The following provisions of Schedule 13 to the Financial Services and Markets Act 2000 shall have effect, with any necessary modifications, in relation to the Claims Management Services Tribunal—
	(a) paragraph 5 (remuneration and allowances),
	(b) paragraph 6 (staff),
	(c) paragraph 7(3) and (4) (composition),
	(d) paragraph 8 (sittings),
	(e) paragraph 10 (practice directions),
	(f) paragraph 11 (evidence), and
	(g) paragraph 12(1) to (3) (decisions).
	(6) In Part 1 of Schedule 1 to the Tribunals and Inquiries Act 1992 (c. 53) (tribunals under supervision of Council) insert at the appropriate place—
	
		
			  
			 "Claims management services The Claims Management Services Tribunal established by the Compensation Act 2006."

Baroness Ashton of Upholland: My Lords, in moving Amendment No. 28 I shall speak also to Amendments Nos. 29, 41, 44 and 47. These amendments address an area of particular concern to the Delegated Powers and Regulatory Reform Committee—namely, arrangements for appeals against decisions of the regulator. As I said in Grand Committee, it is important that any decisions which determine a person's civil rights are subject to the safeguards guaranteed by Article 6.1 of the European Convention on Human Rights. I know that the noble Lord, Lord Goodhart, was also concerned about complaints handling, and I hope that these amendments will provide some reassurance.
	Amendments Nos. 28 and 29 provide a mechanism for dealing with appeals. This will involve establishing a new tribunal in legislation, but we propose that its members should be the members of the Financial Services and Markets Tribunal, and that it should be administrated using the existing infrastructure. This will provide an efficient means of hearing what is likely to be a small number of appeals, making the best use of existing judicial and administrative resources. The purpose of the tribunal is both to act as a disciplinary tribunal to which the regulator refers an allegation of misconduct or breach of the rules, and to act as an appellate tribunal where an authorised person appeals against decisions of the regulator. Those decisions might be in respect of a refusal to a grant of authorisation; a grant of authorisation on terms or subject to conditions; the imposition of conditions on authorisation; or suspension or cancellation of authorisation
	The amendments provide that the president, deputy president and members of the tribunal shall be the president, deputy president and members of the Financial Services and Markets Tribunal. There is also provision for the Lord Chancellor to make rules about the proceedings of the tribunal, which will be made subject to statutory instrument subject to the negative resolution procedure. The administration of the tribunal will be dealt with by the Tribunals Service which is being created as an executive agency of the Department for Constitutional Affairs in April 2006. Amendments Nos. 41, 44 and 47 are consequential amendments arising from the insertion of Amendments Nos. 28 and 29.
	I am confident that these amendments provide a comprehensive mechanism for dealing with appeals against decisions of the regulator. I beg to move.

Lord Goodhart: My Lords, this is an extremely important group of amendments, and I am very pleased that the Government have seen fit to include them in the Bill. It is very important that there is an independent tribunal. At the Grand Committee stage, I was very concerned about the position of the regulator as both investigator and judge. While I cannot say that I am entirely happy with that, I think that the position is very much changed by the fact that there is a full right of appeal, unconditional on facts as well as law, to the tribunal. In those circumstances, I think that the requirements of Article 6 of the European Convention on Human Rights to provide an independent and impartial tribunal are adequately met. I no longer wish to press any objection relating to the fact that the regulator will act as both investigator and, so to speak, judge of first instance. I am therefore happy to welcome this group of amendments.

Lord Hunt of Wirral: My Lords, I agree.

On Question, amendment agreed to.

Baroness Ashton of Upholland: moved Amendment No. 29:
	After Clause 9, insert the following new clause—
	"APPEALS AND REFERENCES TO TRIBUNAL
	(1) A person may appeal to the Claims Management Services Tribunal if the Regulator—
	(a) refuses the person's application for authorisation,
	(b) grants the person authorisation on terms or subject to conditions,
	(c) imposes conditions on the person's authorisation,
	(d) suspends the person's authorisation, or
	(e) cancels the person's authorisation.
	(2) The Regulator may refer to the Tribunal (with or without findings of fact or recommendations)—
	(a) a complaint about the professional conduct of an authorised person, or
	(b) the question whether an authorised person has complied with a rule of professional conduct.
	(3) On a reference or appeal under this section the Tribunal—
	(a) may take any decision on an application for authorisation that the Regulator could have taken;
	(b) may impose or remove conditions on a person's authorisation;
	(c) may suspend a person's authorisation;
	(d) may cancel a person's authorisation;
	(e) may remit a matter to the Regulator;
	(f) may not award costs.
	(4) An authorised person may appeal to the Court of Appeal against a decision of the Tribunal."
	On Question, amendment agreed to.
	Clause 12 [Commencement]:
	[Amendment No. 30 not moved.]
	Schedule [Claims Management Regulations]:

Baroness Ashton of Upholland: moved Amendment No. 31:
	Page 8, line 11, leave out sub-paragraph (2) and insert—
	"(2) Regulations by virtue of this sub-paragraph may permit waiver in relation to a person only—
	(a) if the Secretary of State intends to exempt the person under section 4, and
	(b) for a single period not exceeding six months."

Baroness Ashton of Upholland: My Lords, in moving Amendment No. 31, I shall also speak to Amendment No. 33. I agreed in Grand Committee that I would table amendments to make the regulator's power to waive the need for authorisation temporary and time-limited. Amendment No. 31 will amend the provision at paragraph 3 of the schedule as agreed. Amendment No. 33 is consequential on Amendment No. 31. Persons or classes of persons will be exempted by order of the Secretary of State.
	As I have already explained, we envisage that the first order under Clause 4(2) will include all those persons and organisations who will be exempted from the need to seek authorisation. Obviously, we will be compiling a list. However, there may be persons or organisations that are missed from the first order. There may also be new organisations that are established that will also not need to be authorised. These individuals will be able to seek a temporary waiver from the regulator pending the making of a further order. Regulations will require the regulator to inform the Secretary of State of any individual whom he considers should be exempted. He would waive the individual if the Secretary of State concludes that the person or class of person meets the criteria for inclusion in the next order. I beg to move.

Lord Hunt of Wirral: moved, as an amendment to Amendment No. 31, Amendment No. 32:
	Line 4, leave out paragraph (a) and insert—
	"(a) if that person has applied to the Secretary of State for exemption under section 4,"

Lord Hunt of Wirral: My Lords, these are sensible revised proposals. However, bearing in mind that waivers may be granted by the regulator, I am not certain how either the regulator or the Secretary of State will know in advance whether he intends to exempt the person under Section 4, as the current draft reads. It seems to me that it might be better that the power to grant a waiver should be restricted to people who have already applied for an exemption. I beg to move.

Baroness Ashton of Upholland: My Lords, we think that this amendment is probably unnecessary. The regulator could not waive unless the Secretary of State had formed a genuine intention to exempt. To have formed an intention to exempt, the Secretary of State must first have informed himself of the circumstances and position of the candidate for exemption. It is also possible that the Secretary of State may wish to exempt without receiving a specific application for exemption from an individual. Where, for example, he is aware that a body should be exempted—such as the statutory ombudsman, which we have discussed—the Secretary of State would not need to require an application.
	There is also a problem with the drafting of this amendment, as it applies only to a person and fails to address the position of a class of people. It would be an unreasonable burden, for example—although I know that it is not what the noble Lord wants—to require each individual citizens advice bureau to make a separate application for exemption. In a sense, we think that it is obvious how this would work. For that reason only, I do not accept the amendment.

Lord Hunt of Wirral: My Lords, I think that my best policy is now reculer pour mieux sauter. I beg leave to withdraw the amendment.

Amendment No. 32, as an amendment to Amendment No. 31, by leave, withdrawn.
	On Question, Amendment No. 31 agreed to.

Baroness Ashton of Upholland: moved Amendment No. 33:
	Page 8, line 14, leave out paragraphs (a) and (b).
	On Question, amendment agreed to.

Baroness Ashton of Upholland: moved Amendment No. 34:
	Page 8, line 22, at end insert—
	"(2) Regulations may, in particular, require the provision of information or documents relating to the applicant or to any person who appears to the Regulator to be connected with the applicant."

Baroness Ashton of Upholland: My Lords, the Delegated Powers and Regulatory Reform Committee was particularly concerned that the Bill does not specify what minimum criteria must be applied by the regulator when considering applications for authorisation. This group of amendments clarifies what those minimum requirements will be.
	Amendment No. 34 makes it clear that regulations can require applicants to provide relevant information about themselves and any other persons connected with the business. This will ensure that the regulator can properly assess the competence and suitability of those controlling the company—for example, the directors and chief executive of a limited company or the partners in a partnership. Controlling individuals will be required to provide personal information about criminal records, their involvement in proceedings before any court or tribunal and any findings against them by a professional or regulatory body. The regulator may check this information against criminal records, the Disqualified Directors Register or records of disciplinary action held by professional or regulatory bodies.
	On Amendment No. 40, we wanted to make clear that when granting authorisation, the regulator can determine the scope of that authorisation—both according to the type of claim handled and the level of advice provided. It is important that we reflect this for two reasons: first, the complexity of the regulatory task is directly related to the complexity of the work authorised persons undertake on behalf of consumers, so both the level of fees and the stringency of the authorisation process will need to vary accordingly; and, secondly, some rules will apply only to more complex work—for example, some rules would be relevant only if the claims management company offered advice to the consumer on their claim. I will be saying a little more about these other issues when we come to Amendment No. 35. On that basis, I hope that noble Lords will be able to accept the amendments and I beg to move.

On Question, amendment agreed to.

Baroness Ashton of Upholland: moved Amendment No. 35:
	Page 8, line 23, leave out from "Regulations" to end of line 35 and insert "shall require the Regulator not to grant an application for authorisation unless satisfied of the applicant's competence and suitability to provide regulated claims management services of the kind to which the application relates.
	(2) For that purpose the Regulator shall apply such criteria, and have regard to such matters, as the regulations shall specify.
	(3) Regulations by virtue of sub-paragraph (2) may, in particular—
	(a) refer to a provision of directions, guidance or a code given or issued under section 3(4);
	(b) relate to persons who are or are expected to be employed or engaged by, or otherwise connected with, the applicant;
	(c) relate to—
	(i) criminal records;
	(ii) proceedings in any court or tribunal;
	(iii) proceedings of a body exercising functions in relation to a trade or profession;
	(iv) financial circumstances;
	(v) management structure;
	(vi) actual or proposed connections or arrangements with other persons;
	(vii) qualifications;
	(viii) actual or proposed arrangements for training;
	(ix) arrangements for accounting;
	(x) practice or proposed practice in relation to the provision of information about fees;
	(xi) arrangements or proposed arrangements for holding clients' money;
	(xii) arrangements or proposed arrangements for insurance."

Baroness Ashton of Upholland: My Lords, Amendment No. 35 makes it clear that regulations will require the regulator to satisfy himself of the competence and suitability of an applicant before granting authorisation. It also puts the regulator under a duty to apply the criteria set out in regulations. During the debates in Grand Committee, noble Lords made a number of helpful suggestions about what these minimum criteria should be. The amendment specifies the areas to which the criteria should relate. We want to retain flexibility of the regulatory framework to ensure it can respond to the changing nature of the market, so the precise detail will be expanded in regulations and of course more criteria can be added.
	As I have already mentioned, in addition to information about the company, the controlling individuals in that company will be required to provide personal information to which I have already referred. They will also be required to make a statement of competence demonstrating that they have the knowledge and skills required to provide the regulated service, including details of relevant experience. The applicant, person or organisation will be required to certify that they have read and understood the rules and codes of practice, and sign a declaration that they comply, and will continue to comply, with them. The regulator will then assess an application, and will make a judgment, based on all the evidence available, about whether or not to grant authorisation. That will take account of both the applicant's fitness and competence to provide the regulated service, and compliance with the rules and codes of practice.
	The procedure I have outlined will allow a robust assessment of the competence and suitability of applicants—something which I know concerns the noble Lord, Lord Hunt of Wirral. I hope he will welcome the amendment as helping to ensure that only those who meet the standards are allowed to offer regulated claims management services to consumers. I beg to move.

Lord Hunt of Wirral: moved, as an amendment to Amendment No. 35, Amendment No. 36:
	Line 10, after "relate" insert "both to the applicant and"

Lord Hunt of Wirral: My Lords, in the amendments introduced by the Government today there is a sensible list of criteria which the regulator should consider. But there are two potential gaps in the list. The Minister will know how concerned I am about the way in which claims management services are advertised. I believe this to be an area which the regulator ought to be considering on any application. Many of the current advertisements are frankly distasteful. More particularly, Amendment No. 38 would enable the regulator, when considering an application from an existing provider of services, to look at their track record on advertising and require some improvement.
	My second point about the list relates to the problems caused by claims farmers who fail to advise claimants that a free alternative service is available. That is particularly rife in the area of endowment mis-selling but has been a problem elsewhere—in the context of criminal injury claims, for example. In Grand Committee, I highlighted the actions of one particular company following the tragic bombings on 7 July. This is an important area of activity to be considered by the regulator when granting authorisations.
	My final point on the criteria for the regulator is a technical one about the Government's drafting on paragraph 5(2)(b), where it seems that the regulations proposed need to refer to the applicant for authorisation as well as to persons employed or otherwise connected with the applicant. I beg to move.

Lord Goodhart: My Lords, owing to an error which I made yesterday, I arranged for Amendment No. 37—which ought to be in this group—to be put into the following group. I hope that the Minister will not mind if I speak to it now as part of this group, where it obviously belongs.
	The background to this is that the Bill as it now stands permits or requires,
	"the application of subjective criteria relating to competence or suitability".
	I expressed my unhappiness with that in Grand Committee and I am glad to see that that particular version has gone as a result of the amendment now being proposed. We now have a long list of relatively subjective criteria. I noticed that the first draft that was produced added a further criterion which was honesty, which seemed to open up far too wide a field of investigation and was again potentially highly subjective and much too general, so I am glad to see that it does not appear in the amendment in its final form. However, one thing that is missing here is any evidence of professional or business misconduct. That ought to be included in the criteria.
	The list includes:
	"criminal records; proceedings in any court or tribunal; proceedings of a body exercising functions in relation to a trade or profession",
	and so forth. Professional or business misconduct may well be caught by proceedings in a tribunal or,
	"proceedings of a body exercising functions in relation to a trade or profession",
	but it is certainly not inevitable that that would be the case. I would have thought that where there is evidence of professional or business misconduct, that ought to be an important criterion for the regulator to consider. In those circumstances, I hope that the Minister will consider adding this as another criterion. I am happy with the criteria otherwise set out in sub-paragraph (3)(c) of the amendment.

Lord Borrie: My Lords, I understand the pressures on time, but the noble Lord, Lord Hunt of Wirral, referred on a number of occasions in Grand Committee to advertisements. He gave examples again this evening of "distasteful" advertisements by claims management companies and other problems arising because claims management companies have failed to indicate—thereby confusing people watching television or reading—that alternative services are available free of charge. These matters concerned him.
	My noble friend the Minister stated that research had been undertaken by or on behalf of the Advertising Standards Authority—I declare my interest as chairman. This has been funded mostly by the Department for Constitutional Affairs, the Minister's own department, but also partly by the Advertising Standards Authority. The first results—which I have seen in draft and which will be fully available to everybody in April—suggest that a number of distasteful advertisements of the kind mentioned could be dealt with, if they continue to exist, by the Advertising Standards Authority's own code of practice, dealing with misleading or offensive advertisements. I have to admit that not all could be.
	For example, the rubric in our advertising code of practice is something like that any advertisement which is seriously offensive or likely to cause widespread offence is a breach of our codes of practice. There is a difference between taste and offensiveness. One advertisement mentioned by the noble Lord, Lord Hunt, in Grand Committee suggests that, if compensation is won as the result of a successful claim, then you can have a nice holiday in the Caribbean. I am not sure I see that as being offensive, though I can see it will be distasteful from certain points of view. You may think it distasteful, and perhaps you wish to regulate against it, but I have to admit that the Advertising Standards Authority would find it difficult to regard it as coming within its rubric of being offensive.
	Similarly, some of the things that the noble Lord seems to want are really matters of better consumer education, rather than for advertisements to deal with them. For example, I do not expect—nor does my authority—advertisements to include the services that may be offered by rivals, or offered free of charge by somebody else. An advertisement is a promotion of one's own commercial and marketing practice and services. While I would like to see a lot of caution in this regard, I have some sympathy for the view put forward by the noble Lord, Lord Goodhart, that there is a need in authorisation processes to have some kind of conduct-of-business rules. So long as these are carefully considered one by one, and not just dashed off as the result of some amusing or distasteful advertisements and practices that have been mentioned in Grand Committee or today, I see no objection to that.

Lord Hunt of Wirral: My Lords, I am grateful to the noble Lord for giving way. One is particularly appalled by the advertisement in the hospital where, as you enter an accident and emergency department, there is a poster saying that if the doctor or nurse makes you worse, then you have a claim. It is that sort of distasteful advertisement that I have particularly in mind, and I am sure he would agree.

Lord Borrie: My Lords, I fully agree with that, and it enables me to make the distinction between the content of the advertisement and other features such as where it is placed. To have that sort of advertisement in a hospital is distasteful, to use that appropriate word. It ought not to be there, and there ought to be arrangements made with the health service and so on to ensure that it is not.

Baroness Ashton of Upholland: My Lords, I am grateful to noble Lords for the opportunity to discuss many of these issues. On Amendment No. 36, moved by the noble Lord, Lord Hunt of Wirral, I know that he recognises the importance that we attach to ensuring that individuals are captured. I hope he will recognise that, in two or three of the amendments that we talked to earlier today, we have clarified our intention for authorisation in a way that will reassure him.
	As I said earlier, we envisage that entities will be authorised as either individuals, partnerships or companies. Where a partnership or company is authorised, the controlling individuals within that partnership or company will be assessed for their competence and suitability to provide the authorised services. The amendment is unnecessary as Amendment No. 35 already requires the regulator to be satisfied of the applicant's competence and suitability, and requires the regulator to apply the criteria specified in regulations for that purpose.
	On Amendment No. 37, the noble Lord, Lord Goodhart, seeks to cover areas which we believe are already caught by one or more of the headings that we have specified in Amendment No. 35. I have not been able to establish a relevant professional or business misconduct which would not fall either within sub-paragraph (c)(iii),
	"proceedings of a body exercising functions in relation to a trade or profession",
	or relate to criminal and other court proceedings. I was nervous about accepting this amendment because the wording is quite broad, and we do not want to give the regulator open discretion in any activity that appears to him to amount to misconduct. It is better that we stick within the objective criteria. If the noble Lord can think of something that is not covered, I would be more than happy to discuss that with him. That is the basis of rejecting the amendment, and not because I disagree at all with the spirit of it.
	On Amendment No. 38, as my noble friend Lord Borrie has indicated, we are looking at the research, and have just had the early result in. To correct my noble friend—he will not mind—we plan to have the research available to your Lordships before Third Reading because we thought you would want to see that. I hope that this will be before April. That is the only difference, and I apologise to my noble friend. That is the decision I have taken, and it is important that we do that.
	As my noble friend said, we want to look carefully at the findings. The intention is to present the research to the code-owning bodies, the Committee of Advertising Practice and the Broadcast Committee of Advertising Practice, so that they can judge whether changes to the advertising codes would be necessary or appropriate. The Department for Constitutional Affairs does not plan to legislate on advertising, other than to ensure that the rules governing the activities of persons authorised to provide claims management services place those persons under a duty to market their services responsibly. To breach the rules would be a conduct issue, much as solicitors are covered. If the ASA has upheld a complaint about an advertisement placed by an authorised person, this would likely lead to a disciplinary investigation by the regulator. I hope this will address those particular concerns. As for hospitals, my honourable friends in the ministerial group are looking at this issue in the context of the health service.
	On Amendment No. 39, again I found myself in agreement with the spirit of what the noble Lord is saying, but we think we have adequately covered this by amending the criteria for designating the regulator to include particular reference to the provision of information about charges and other matters. As I have indicated, the Government see this as a guiding principle of regulation.
	I hope I have addressed all the points that noble Lords raised, and that they feel able to withdraw their amendments while I move mine.

Lord Hunt of Wirral: My Lords, I beg leave to withdraw the amendment.

Amendment No. 36, as an amendment to Amendment No. 35, by leave, withdrawn.
	[Amendments Nos. 37 to 39, as amendments to Amendment No. 35, not moved.]
	On Question, Amendment No. 35 agreed to.

Baroness Ashton of Upholland: moved Amendments Nos. 40 and 41:
	Page 9, line 4, at end insert—
	"(c) permit the Regulator to grant an application for authorisation only to a specified extent or only in relation to specified matters, cases or circumstances."
	Page 9, line 24, leave out paragraph 8.
	On Question, amendments agreed to.
	[Amendment No. 42 not moved.]

Lord Goodhart: moved Amendment No. 43:
	Page 9, line 28, after "professional" insert "and business"

Lord Goodhart: My Lords, I intend to be brief because the amendment involves a small point. Amendments Nos. 43, 46 and 56 concern a number of references to professional conduct of authorised persons in the schedule to the Bill. I raise this because it is hard, basically, to describe claims management as a profession. Admittedly, a considerable number of the people involved will be solicitors who are members of the profession, but there are also many people involved who are not. In those circumstances, it seems inappropriate to refer to professional conduct, simply and completely. Originally—in Grand Committee—I proposed to delete the word "professional"; here I have come up with an alternative solution, which is to say "professional and business". That seems to be more appropriate than simply to refer to professional conduct. I beg to move.

Baroness Ashton of Upholland: My Lords, I have also consulted legal advice on Amendments Nos. 43, 46 and 53, tabled by the noble Lord, Lord Goodhart. The advice that I have is that inserting the words that the noble Lord suggests—and I completely understand what he is seeking to do—would be wrong. It would have unforeseeable implications in terms of meaning here, because it could create or exacerbate doubt elsewhere in statute if we included a reference to "business".
	I understand that there are numerous examples of the word "professional" in legislation as applying to occupations outside those which used to be known as "the professions". These include Section 1 of the Defective Premises Act 1972, involving the duty to ensure that a dwelling house is built in a professional manner; Section 98 of the Criminal Justice and Police Act 2001, in reference to opportunities for "professional development" of police officers; and Section 59 of the Charities Act, in reference to "professional fund raisers". Given that the use of the word profession is well understood in statutory terms and the addition could cause added confusion, I am unable to accept the amendment and hope the noble Lord will withdraw it.

Baroness O'Cathain: My Lords, why do we have the word "profession" at all if it is creating so much confusion? Surely "occupation" would have done, would it not?

Baroness Ashton of Upholland: My Lords, we have sought to define as far as we can within legislation the group that we are seeking to address. The difficulty that we have is that we all know what we mean, as with the noble Lord's amendment. The trouble is that there are other implications, as the noble Baroness knows well, when one tries to translate that into how it appears in statute. The "ripple effect", as I have learnt to call it, is something that I have to be conscious of, and that is the basis on which we have to operate at the moment.

Lord Goodhart: My Lords, I cannot say that I am wholly convinced but, given that this is far from being the most important matter in the Bill, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Baroness Ashton of Upholland: moved Amendment No. 44:
	Page 9, line 41, leave out paragraph (iii).
	On Question, amendment agreed to.

Baroness Ashton of Upholland: moved Amendment No. 45:
	Page 9, line 43, leave out "may" and insert "shall"

Baroness Ashton of Upholland: My Lords, this amendment makes it a mandatory requirement for the regulations to enable the regulator to issue a code of practice about the conduct of authorised persons. This will be an important document, which will outline the standards of service consumers can expect from authorised providers of regulated claims management services and is something the regulator should be required to issue. The code of practice will be prescribed by the regulator and he will consult on the content before seeking approval from the Secretary of State. The code will be a useful document for consumers, as it will clearly set out the behaviours that they can expect to receive from persons offering claims management services. I hope that noble Lords will be happy with that move from "may" to "shall". I beg to move.

Lord Hunt of Wirral: My Lords, as I said before, hooray.

On Question, amendment agreed to.
	[Amendment No. 46 not moved.]

Baroness Ashton of Upholland: moved Amendment No. 47:
	Page 10, line 10, leave out paragraph (iii).
	On Question, amendment agreed to.
	[Amendments Nos. 48 to 50 not moved.]

Baroness Ashton of Upholland: moved Amendment No. 51:
	Page 10, line 12, leave out paragraph 11 and insert—
	"11 (1) Regulations shall provide for the Regulator to investigate complaints about the professional conduct of an authorised person.
	(2) Regulations under sub-paragraph (1) shall enable the Regulator to—
	(a) impose conditions on a person's authorisation;
	(b) suspend a person's authorisation;
	(c) cancel a person's authorisation."

Baroness Ashton of Upholland: My Lords, the amendment clarifies the arrangement for handling complaints, which I know that the noble Lord, Lord Goodhart, was particularly concerned about. Authorised persons will be required to have in place a procedure for handling consumer complaints. When a consumer feels that a complaint to an authorised person has not been resolved, they may refer the matter to the regulator. We envisage that there will be a separate division within the administrative structure to investigate and determine the complaint. It may be possible for the regulator to delegate some of its complaints handling functions, which would provide a flexible mechanism for dealing with an unpredictable number of complaints. As noble Lords know, delivering the functions in practice will ultimately depend on the determination we make of the regulator. If the complaint is upheld, the regulator will either issue a warning or take disciplinary action.
	A decision of the regulator to suspend or cancel a person's authorisation would have the effect of determining a civil right and would be subject to Article 6 of the European Convention on Human Rights. To ensure compliance with the convention, regulations will provide that such decisions will not come into effect for a period of 28 days, during which time authorised persons can appeal the decision to the tribunal, which we have already indicated will be set up and which we agreed under previous amendments. This will ensure that an authorised person has a fair hearing before an independent and impartial tribunal for the purposes of Article 6.
	However, when multiple or particularly serious allegations are involved, regulations will provide the regulator with the discretion to apply to refer disciplinary matters directly to the tribunal without himself reaching a decision. The regulator will have the power to seek an interim direction prohibiting the provision of claims management services pending a full hearing. This could be used when there was the potential for serious harm to consumers. The arrangements envisaged for handling complaints are an interim measure pending the creation of the proposed Office for Legal Complaints under the proposed reforms to the wider framework for the regulation of legal services. I am confident that the amendment clarifies the proposed approach. I hope that noble Lords agree. I beg to move.

Lord Hunt of Wirral: moved, as an amendment to Amendment No. 51, Amendment No. 52:
	Line 2, leave out "provide for" and insert "require"

Lord Hunt of Wirral: My Lords, the Government have sensibly proposed an amendment to tidy up paragraph 11 of the schedule, dealing with provision for the regulator to investigate complaints about the conduct of authorised persons. The number of complaints is unlikely to be very great and there really should be a requirement that the regulator should investigate all of them. That is the purpose of this short amendment. I beg to move.

Lord Goodhart: My Lords, the Government's amendments are very sensible, and I am very grateful to the Minister, not only for the amendments but for giving some background information, going outside what is in the Bill, about how the provisions will operate.

Baroness Ashton of Upholland: My Lords, I am grateful to the noble Lord, Lord Goodhart, for his comments.
	The reason why I am not going to accept Amendment No. 52 is that, in the vast majority of cases, we would expect complaints to be resolved between the authorised person and the consumer, and we want to involve the regulator only when the complaint was not resolved to the consumer's satisfaction, rather than his looking at everyone. So there might be circumstances in which a consumer approaches the regulator with a complaint and, when they have not done so already, is advised to approach the authorised person, and it is then resolved. That would not be permissible under the amendment, and I hope that the noble Lord accepts that that is why I am not accepting it.

Lord Hunt of Wirral: My Lords, that is a reason that I accept. I beg leave to withdraw the amendment.

Amendment No. 52, as an amendment to Amendment No. 51, by leave, withdrawn.
	[Amendment No. 53, as an amendment to Amendment No. 51, not moved.]
	On Question, Amendment No. 51 agreed to.
	[Amendment No. 54 not moved.]

Baroness Ashton of Upholland: moved Amendment No. 55:
	Page 10, leave out lines 28 and 29 and insert "a client of an authorised person where—
	(a) money is paid to the authorised person in complete or partial satisfaction of the client's claim, and
	(b) the client is unable to obtain all or part of the money because the authorised person becomes insolvent or is otherwise unable or unwilling to pay."

Baroness Ashton of Upholland: My Lords, in moving Amendment No. 55, I shall speak also to Amendments Nos. 56 and 57.
	I gave an undertaking to this House that I would address as appropriate concerns raised by the Delegated Powers and Regulatory Reform Committee. I have done so and this group of amendments specifically addresses the concerns that the committee raised about the compensation scheme.
	Amendment No. 55 makes it clear that the compensation scheme will apply only to claims management companies that handle clients' money. When an authorised person has been paid money directly on behalf of a client but fails to pass this on, for whatever reason, the client should in the first instance try to recover the money from the person's professional indemnity insurance. There may be circumstances in which the insurance will not cover the loss—for example, when the company has not paid the premium, or the company has become insolvent. There may also be circumstances where the authorised person had acted dishonestly. In those circumstances, the authorised person would either be unable or unwilling to meet the loss. The compensation scheme may therefore provide a remedy to recompense the client with the money he has lost.
	There may also be circumstances in which the authorised person is unwilling to pay the money because he disputes the cost. Informing clients of the costs involved in bringing a claim and continuing to keep them informed of costs will be a requirement of the rules. Any breach of this requirement might result in the regulator taking action against the authorised person for misconduct.
	Amendment No. 56 makes it clear that funding for a compensation scheme will be met by authorised persons; also, that payments or financial assistance will not be met from government funding. Amendment No. 57 removes the reference to an appeal, as that is no longer necessary.
	As noble Lords know, I have separately tabled amendments, which we debated earlier this evening, making it clear that sanctions imposed by the regulator can now be appealed to the independent tribunal that we are setting up under the legislation. I hope that your Lordships will feel able to accept this. I beg to move.

Lord Hunt of Wirral: My Lords, I welcome this amendment.

On Question, amendment agreed to.

Baroness Ashton of Upholland: moved Amendments Nos. 56 to 59:
	Page 10, line 34, at end insert "and may not include payments, or other financial assistance, by a Minister of the Crown);"
	Page 10, line 38, leave out paragraph (e).
	Page 11, line 1, leave out paragraphs (b) to (d).
	Page 11, line 10, at end insert—
	"(1A) The Regulations may provide that on an application by the Regulator a judge of the High Court, Circuit judge or justice of the peace may issue a warrant authorising the Regulator to enter and search premises on which a person conducts or is alleged to conduct regulated claims management business, for the purpose of—
	(a) investigating a complaint about the activities of an authorised person, or
	(b) assessing compliance with terms and conditions of an authorisation.
	(1B) Regulations may enable the Regulator to take copies of written or electronic records found on a search by virtue of sub-paragraph (1A) for a purpose specified in that subsection.
	(1C) Regulations may enable the Regulator to impose conditions on, suspend or cancel a person's authorisation if—
	(a) a requirement imposed by virtue of sub-paragraph (1) is not complied with, or
	(b) an attempt to exercise a power by virtue of sub-paragraph (1A) or (1B) is obstructed."
	[Amendment No. 60, as an amendment to Amendment No. 59, not moved.]
	On Question, Amendments Nos. 56 to 59 agreed to.

Baroness Ashton of Upholland: moved Amendment No. 61:
	Page 11, line 13, leave out from "shall" to end of line 17 and insert—
	"(a) specify matters of which a judge or justice of the peace must be satisfied, or to which he must have regard, before issuing a warrant under sub-paragraph (1A),
	(b) regulate the exercise of a power under or by virtue of sub-paragraph (1), (1A) or (1B) (whether by restricting the circumstances in which a power may be exercised, by specifying conditions to be complied with in the exercise of a power, or otherwise)."
	On Question, amendment agreed to.
	In the Title:

Baroness Ashton of Upholland: moved Amendment No. 62:
	Line 2, after "negligence" insert "or breach of statutory duty"
	Title, as amended, agreed to.

Transmissible Spongiform Encephalopathies Regulations 2006

The Countess of Mar: rose to move, That an humble Address be presented to Her Majesty praying that the regulations, laid before the House on 20 January, be annulled (S.I. 2006/68) [22nd Report from the Merits Committee].

The Countess of Mar: My Lords, I declare my interests. With my husband, I am a partner in our small family farm. We have cattle, sheep, goats, pigs and poultry, all in small numbers and farmed extensively. We make goat cheeses and sell them, goats' milk, lamb and pork through our farm shop.
	The last time that I moved a Motion praying to annul a TSE regulation was on 15 May 2002. I did that based on my concern that the TSE Regulations 2002 were over-prescriptive and neither reasonable nor proportionate. I do so again on this occasion, but would add that I do not believe that the regulations now before us are based on sound science. The noble Lord, Lord Livsey of Talgarth, moved an amendment to my prayer in 2002 calling upon Her Majesty's Government,
	"to keep the regulations under review in the light of scientific and technological developments relating to TSE".
	I remind noble Lords, and the Minister in particular, that that amendment was agreed to but has not, as far as I can see, been carried out. There is very little difference between the regulations currently before us and those before us in 2002. Noble Lords may also recall that I went much more deeply into my reasons for doubting the science during our discussions on the Animal Health Act 2002.
	We have repeatedly been assured that the Government base all decisions on sound science, where applicable. Since the first regulations came into force, the science has moved on considerably, yet there is no indication that this knowledge has found its way into the regulatory arena. In fact, much recent research raises doubts about the origins of the so-called "infectious agent". These and other regulations are based on the widespread assumption that a rogue isoform of a protein designated PrP—called prion protein by some—causes TSEs. That hypothesis is unsupported by rigorous analysis and substantial data contradict it.
	In recent weeks, it has been announced that another type of scrapie, distinct from what some refer to as classical scrapie, has emerged. Professor Christopher Higgins—chairman of the Spongiform Encephalopathy Advisory Committee, or SEAC—was heard to say, on "Farming Today" on 27 February, that there was a classical scrapie but that there is now a new disease, which can be distinguished from both it and BSE and has been named "atypical scrapie". I am astonished.
	In 1986, Dickinson et al presented a paper at the second Paris symposium entitled "Further evidence that scrapie agent has an independent genome". In their summary they state that,
	"Many distinct strains of scrapie have now been characterised in terms of their biological and neuropathological properties and a number of them have been re-isolated several times from different breeds of sheep and goats".
	I understand that the neuropathogenesis unit in Edinburgh had, at that time, isolated more than 25 strains and characterised two-thirds of them in detail. Throughout the 1970s, Dr. Dickinson's group correctly predicted a variety of aspects of TSE infectious agents and their diseases; for example, that infection with more than one strain of scrapie could involve competition between strains in production of disease. These accurate predictions were summarised in 1998 by Farquhar C.F. et al in Nature. Why is it that TSE researchers in Edinburgh, such as those at Moredun Research Institute, are refused information about which scrapie strains have been used as a basis for the design of the National Scrapie Plan?
	A number of researchers, including Hugh Reid, former head of microbiology at the Moredun Research Institute—which I shall call the MRI—Ian Aitken and Bill Martin, both former directors of the MRI, and Alan Dickinson, former director of the ARC and MRC Neuropathogenesis Unit, Edinburgh have been closely involved in TSE research, the last named for longer than anyone else worldwide. One of them recommended over 20 years ago that measures to reduce scrapie should avoid genetical extremes. Since then, many more details have been added to their understanding of TSE diseases, but the principles underlying that recommendation have not changed. They say that,
	"In particular, the possibility still exists that some TSE strains may exist, or may arise, that will be able to replicate in the purportedly resistant genotype. In this event, the entire sheep population would then be at high risk".
	That prediction is now proving to be correct because the "atypical scrapie" cases are in genotypes being selected by the National Scrapie Plan. In previous debates in your Lordships' House I, too, voiced my concerns that this is what would happen.
	Most of those currently investigating the nature of TSE agents have chosen to work only with the quickest and highest infectivity titre rodent models and have assumed that extrapolation to other models would be valid. Furthermore, they have almost exclusively used the intracerebral route, which will never be a natural route of infection. That route may simply be the means of transferring amyloid primer and cerebral amyloidosis may be confused with a TSE infection.
	There is also concern that the methodology is not always explained in detail, which is essential as, for example, the likelihood of laboratory contamination with TSE agents and cross-contamination between strains is well known. There is now sufficient new and reassessed information to challenge the hypothesis that the proteinase K-resistant PrP present in TSEs is the real infectious agent per se. Can the Minister please explain why, in a situation such as that surrounding scrapie, BSE, CJD or foot and mouth disease, the Government seem to turn to scientists who are not regarded by their peers as experts in the area while ignoring those who are? Is it not in everybody's interests to obtain the very best scientific advice, especially in areas where scientific uncertainties exist? Had we obtained the very best advice from the beginning, I wonder whether we would be in the position of requiring this legislation.
	I turn now to the regulations themselves. I expect the Minister to tell me that these regulations are merely transcribing EU regulations into our law. That may well be the case, but we should surely ensure that the words we enshrine into our law are capable of being interpreted reasonably and that their intention can be translated sensibly and proportionately. It is somewhat disconcerting to find that, as early as paragraph (4)(1) of Part 1, the only exception listed is for research animals. EU Regulation 999/2001 clearly states that the rules apply only to animals which will enter the food chain. They do not apply to show animals, special collections of animals or anything to do with cosmetic or medical work, provided they do not enter the food chain. I am confident that this is not made clear in the statutory instrument.
	Regulation 6 requires the Secretary of State and the local authority to,
	"appoint inspectors for the purposes of enforcement of these regulations, except as specified in Schedule 6".
	Nowhere is there any indication of the qualifications that would be required of the inspectors. That is deeply worrying, for they have extraordinarily wide and draconian powers. Regulation 18 lists some of them. Regulation 18(1)(a) requires that they must be strong enough to seize any animal. I understand that in this context "animal" means any animal except a human—so it could be an elephant, or a mouse. For Regulation 18(1)(b), (d) and (f) they must be detectives and scientists, or at least laboratory technicians, and for Regulation 18 (1)(c) they must be skilled stockmen or women. If they require the keeper of an animal to assist them with collecting and penning that animal, they must presumably be sensitive and have good communication skills.
	Regulation 18(1)(g) and (h) require the inspectors to have clerical skills, and to be competent computer technicians. Regulation 19(3)(c) also requires that they have the skills to kill or slaughter any animal. That may involve killing by intravenous injection or shooting with a captive bolt and pulping the brain for a farm animal, or shooting with a rifle for a wild one, with all sorts of other means in between. Noble Lords must agree that such a paragon of virtue, if such a one exists, would command an extraordinary salary. On the other hand, it might be that what is envisaged is a host of inspectors, each with a particular skill, who would appear as a team to enter any premises to ensure the Community TSE regulations, and these regulations, are being complied with. Perhaps the Minister will enlighten me as to which option the Secretary of State proposes to select.
	Is it really the Secretary of State's intention that she should collect dead bovine or caprine animals personally? Is there any possibility that she might do so? If not, why include this in Regulation 1(1)(b) in Part 1 of Schedule 2? Why not simply say "on behalf of the Secretary of State"? Also in this section, Regulation 5(2)(a) requires the occupier of a slaughterhouse immediately to dispose of,
	"the carcase and all parts of the body of that animal (including the blood and the hide)",
	while at Regulation 5(2)(b), unless he has a derogation,
	"the carcase and all parts of the body (including the blood and the hide) of the animal immediately preceding that animal on the slaughter line and the two animals immediately following it".
	What is the scientific rationale for the requirement that, in the event of a TSE-positive result, or of a no-test result, the slaughterhouse occupier must dispose of the carcass and all parts of the body, including blood and hide? For what scientific reason does this apply only to bovines, and not sheep and goats? Why, in the event of a positive test result, is compensation automatically payable, while in the case of a no-test result the decision to compensate the owner of an animal rests with the Secretary of State? Under what circumstances can the owner of an animal who is not the occupier of a slaughterhouse be responsible for events leading to a no-test result when the tests are done post mortem? I am beginning to wonder whether those who drafted these regulations would not benefit from the experience of working for a few days on a farm and in an abattoir.
	I turn to Schedule 4. Should we really be enacting legislation based upon out-of-date scientific knowledge? It is already accepted, as I have demonstrated, that previously held hypotheses about TSE-resistant and susceptible genotypes in sheep have been found wanting. Therefore, what is the point of sampling animals to establish their genotype, as required in Regulation 6(1)(b)? Upon what basis will the Secretary of State decide, under Regulation 6(3)(a) to (d), which animals, ova or embryos should be killed and destroyed, which are suitable for human consumption and which may be retained, if her decisions are not based on genotypes?
	As a goat-keeper, I feel strongly about paragraph 7(1), which requires a whole herd of goats to be killed and destroyed in the rare event of one animal with TSE being discovered on a holding. In reality, I am pleased to note that, for the two herds where scrapie has been found in goats, the rest of the herds have been reprieved for the time being, and I thank the Defra officials who made representations to the EU for derogation in those cases. It is good to know that common sense sometimes prevails.
	It is not my intention to divide the House on this occasion. I want the Minister to know that I am extremely concerned that all regulation in this field is based on a hypothesis—not even a theory—that none of the "establishment" scientific community can prove, despite millions of pounds of taxpayers' money being thrown at the subject. I believe the answer is there among the experts in the subject.
	I seek two reassurances from the Minister, which I doubt I will get: first, that the will of the House on 15 May 2002 be observed; and, secondly, that a change of direction is in sight, and that future decisions will indeed be made on the basis of sound science. I beg to move.
	Moved, That an humble Address be presented to Her Majesty praying that the regulations, laid before the House on 20 January, be annulled (S.I. 2006/68) [22nd Report from the Merits Committee].—(The Countess of Mar.)

Baroness Byford: My Lords, I am grateful to the noble Countess, Lady Mar, for bringing these regulations to the attention of the House tonight. She has explained and gone into her concerns in great detail. I do not propose to repeat all that she has said because that would make this a very long session, but I do thank her.
	I have questions for the Minister on two particular issues she has raised. First, in her contribution, the noble Countess asked why TSE researchers in Edinburgh, such as the Moredun Research Institute, are refused information about which scrapie strains have been used as a basis for the design of the national scrapie eradication plan. We should have an answer to that. Secondly, we should seek clarification from the Minister on the qualifications that would be required of the inspectors. I apologise for my voice, as well.
	When the 2002 TSE regulations were debated, concern was expressed that they were over-prescriptive. The Minister restated the Government's confidence that these regulations were appropriate, but I question that again tonight. The issues raised by the noble Countess reinforce that. She inquired again of the Minister if he is confident about the soundness of the science on which decisions are being taken.
	I am sure the Minister would agree that atypical scrapie is a sporadic eruption of the disease that can occur in even the most resistant genotypes. I understand that knowledge of it is still growing, but that it is still incomplete. It does, however, happen where there is no connection by breeding or any other occurrence of the disease. While the atypical disease has similarities to classical scrapie, it is not necessarily precisely the same, hence its title "atypical". I would like the Minister to comment on that.
	I shall turn to the nitty-gritty of these regulations. On Regulation 17(1), how is an inspector to know when or whether domestic premises are being used in connection with these regulations? If entry is going to be made, I presume, although I did not see it, that a warrant would be obtained first. In all the other regulations we have talked about, a warrant is normally sought when entry is to be made into a domestic dwelling. Could I have it confirmed that this is also appropriate here?
	On Regulation 22, how can Defra justify penalties of this magnitude in the face of the Prime Minister's announcement 10 days ago that he will introduce fines of up to £1,000 for assault or harassment of NHS staff, when here there is a possibility of a prison sentence as well? In Regulation 1(1) of Part 1 of Schedule 2, 1(1) of Schedule 3 and 1(1) of Schedule 4, is there any significance in the use of the phrase "under his charge", compared with "under his control" in the other two? What is the difference?
	In Regulation 6(3) in Part 1 of Schedule 2, why is the charge to be met by the occupier if the no-test could relate to a sample that cannot be tested for any reason, as in Regulation 5(3) in the same schedule? At page 17, paragraph 2, does the,
	"determination of whether or not",
	mean the same as "confirmation that", and if not, will the Minister explain how one determines a suspicion? At page 29, paragraph 6(2), which deals with compensation, would the valuer's fee have to be paid by the owner, even where the suspect feed had been contaminated before it was delivered to the owner? Would it have to be paid by the owner even if it were proved after the slaughter of the animal that the inspector's belief that the feed was contaminated was erroneous?
	I turn to page 19 and ask the Minister to look at the compensation table. It was only 10 February that we passed that statutory instrument. The noble Baroness, Lady Farrington, was the Minister who responded at that time. I raised the question of why pedigree beef animals at the younger age received no compensation when clearly in all other sectors at that age compensation was paid. I raised it in the debate then on 10 February but I have had no word at all from the department. I would expect that the matter could be clarified tonight. I fail to understand why a pedigree animal does not qualify for payment. It is beyond me. I beg to support the noble Countess in the questions that she has raised tonight.

Lord Hylton: My Lords, once again I declare my interest as a farmer and as a dairy producer of milk. I would like to thank my noble friend Lady Mar for giving us the chance of this debate and for the rigorous way in which she examined the regulations. I welcome the element of consolidation included in the regulations and in general the control and eradication provisions, subject always to the application of the most recent, relevant and accepted science, a point my noble friend made so forcefully.
	I agree with her that it is more than possible that the powers given to inspectors are too wide; in particular inspectors should be required to return all records taken away within a reasonable time. That is not written in the regulations. Going a little further, Her Majesty's Government should ensure that there are sufficient abattoirs to serve all the main livestock areas in the country. That is necessary both for healthy and for fallen and casualty stock following the concentration that has been going on in recent years in places of slaughter. It is also necessary both on economic and on animal welfare grounds. Will the Government therefore put the matter firmly on the agendas of rural development agencies and of the other quangos supposed to be addressing rural problems? RDAs could be given the task of assisting new, small and medium-sized abattoirs to open in areas of need.
	I turn to a wider point concerning animal health. Is there anyone in the Cabinet who appreciates just how heavy has been the impact of cattle diseases on farming and therefore on the whole of the rural economy? Britain used to be the livestock rearing place of the whole world. Successive epidemics of BSE, foot and mouth disease and TB have ended that, alas. The general public have been momentarily alarmed by media reports of animals with diseases and often of the sluggish official responses. But how many people really understand the cumulative effect of those outbreaks? There is plenty of evidence in terms of farmers who have committed suicide, for example, and of the continuing consolidation into ever-larger farms.
	I have already referred to TB, now very prevalent in cattle in the south and south-west of England and in all Welsh border counties. A decision will soon have to be taken about eradicating badgers around the TB hotspots for cattle. Do we want to kill badgers or to go on killing cows, only to have the healthy remaining stock reinfected? The present policy is costing the country many millions as well as disrupting production and breeding. Will the Government also investigate whether rats can act as TB transmitters; for example, between badgers and the cattle themselves?
	I end by asking a cautionary question. Are we as fully prepared as we can be for Asian bird flu? It is creeping nearer to us all the time. It raises issues of possible vaccination, which could turn out to be important for animal health much more widely across the board.

Baroness Howarth of Breckland: My Lords, I rise to speak against the annulment of the regulations, although I am grateful to the noble Baroness for raising the issue and giving us an opportunity to speak about the issues. I declare an interest as a member of the board of the Food Standards Agency and the deputy chair of the Meat Hygiene Service. I am going to take a broad view of the debate and will not attempt to answer any of the detail, although in another place I hope that the noble Baroness will take advantage of joining the seminars that are going to take place about TSEs. It is my understanding that the atypical scrapie is newly identified—she shakes her head; I say that to her because if she has greater understanding, she would be valued at those seminars and I urge her to join. As she knows, she is always extraordinarily warmly welcomed in the agency.
	However, as a member of the FSA board I have seen the move from a nation appalled by the BSE crisis—my sympathy is with the farmers and the terrible tragedies that they have suffered over the years—and the consequent lack of confidence in food issues generally to one where I believe that we are moving forward confidently to testing and where our surveys show greater consumer confidence across the food chain. All the Food Standards Agency surveys are showing that confidence steadily increasing.
	Consumers and public health are central to this important set of regulations. It covers all the key controls that protect the public from the risk of BSE—I shall return to that issue—including the feed ban, specific risk material controls (SRM) and the testing of cattle aged over 30 months. All provide vital protection against vCJD—a truly horrific disease involving a slow death and no cure.
	I have spoken and worked with relatives of those who have died and who would not wish to take even the proportionate negligible risk. There is consensus among experts in the field, including the advisory committee, SEAC, that vCJD resulted from transmission of infection from BSE in cattle to humans via infectivity in food.
	I know that in the past the noble Countess has talked about the therapeutic use of organophosphates, but experts over the years have looked at that, and in 1997 SEAC concluded that more evidence would be required to justify further consideration of a role for organophosphates in the development of BSE. The BSE inquiry by the noble and learned Lord, Lord Phillips of Worth Matravers, concluded in 2000 that the theory that BSE is caused by organophosphate pesticides was not viable. Professor Horn's review of the origin of BSE stated in 2001 that that theory could not be reconciled with the epidemiology and was not supported by research. All the research that has been reviewed by the Food Standards Agency supports the conclusion that BSE comes from the transmission from food to humans. I am sure that anyone in the Food Standards Agency would be prepared to write to any Member of the House who would like that to be outlined in more detail.
	Policies have to be based on evidence, and the Food Standards Agency must base its views on evidence. If new evidence comes forward, we will review that. The evidence means that it is essential to maintain the confidence of consumers, both in the UK and elsewhere—particularly elsewhere at the moment—that they will be protected. The FSA advised that the OTM rule should not be lifted unless the BSE system that replaced it would be robust. That may be seen as difficult, but it is essential that consumers' health and welfare is protected. That was recognised and shared by stakeholders, including the meat industry. Indeed, on the whole, the slaughtering industry has been a willing partner in setting up the testing system which is now working well in over 40 abattoirs throughout the UK. The controls have been set out at EU level, but without these regulations they could not be properly enforced and that would presumably leave us with the expensive OTM rule. The cost of continuing that would run into huge sums for this country.
	Things have moved on and we are no longer the BSE risk of Europe. Following extensive consultation in 2004, the FSA advised Ministers that, based on risk and proportionality, a move from the OTM rule to testing would also meet the test of protection of public health—but only if the system was robust and was checked by an independent advisory group, bearing in mind the history of this country's BSE.
	Following the work of that group, the FSA concluded that,
	"a reliable testing regime for OTM cattle has been successfully designed and trialled",
	and that,
	"arrangements are in place to ensure that, should the BSE testing regime be implemented, it would be able to operate across the UK to the highest standards".
	But the independent group also considered that a recommended method of practice should be in place before plants could legally slaughter OTM cattle. The testing provisions of the TSE regulations simply implement those recommendations. I am sure the Minister will recognise the balance of care and proportionality that the FSA has brought to the issue and I commend the regulations to the House.

The Duke of Montrose: My Lords, I declare an interest as the owner of a large number of what are regarded as TSE-susceptible animals and as a participant in the voluntary scrapie eradication programme.
	There seems to be a long history to this debate. Fortunately, the situation is not as fraught as it was when we debated the original 2002 regulations, when we were all very conscious of the dangers, not just from BSE but from foot and mouth disease, and the Government had an obligation to implement the European TSE directive in the absence of an updated animal health Bill. We can all be grateful that we are not faced with a similar situation just now.
	However, there seems to be a curious similarity between this measure and the former one; in spite of the extensive effort by the Government to include more than 13,000 organisations in the consultation exercise, only 13 responded. That is an interesting reflection of what happened last time. Either the whole thing is far too complicated for most people to get their head around or the Government have got everything absolutely right.
	There are still areas where we would be grateful for some elucidation. Noble Lords may remember that when the House was discussing the scrapie provisions in the then Animal Health Bill, I moved an amendment seeking to restrict the compulsory slaughter of sheep in the scrapie eradication programme to those regarded as most susceptible of the five deemed categories. This was on account of evidence that among hill breeds, in particular the Scottish Blackface, only 9 per cent qualified for the "most resistant" variety. The purpose of the amendment was to try to ensure that, as science progressed, we would still have the chance to review the next steps that the Government might propose, with the hope that, at the same time, we would begin to understand the particular attributes attached to the different groups and be able to ensure that, by breeding, the essential breed characteristics could be maintained.
	We now have a chance, after four years, to revisit this topic, but the approach taken in the order appears to be based upon exactly the same scientific basis. I have received information that a ram in a Welsh mountain breed, with the highest category of scrapie resistance, was proving very unsatisfactory in terms of his progeny's survivability on the Welsh mountains. Tonight the noble Countess, Lady Mar, has suggested that various strains of scrapie do not obey the same rules as those adopted by the Government. Some of the animals classed as most susceptible may be those that can provide resistance. Perhaps there is a case here—though it would not be a subject for tonight—for the Government to retain a pool of genetic material from those that we are culling. I would be most interested to hear the Minister's response on these issues.
	We should still congratulate the Government on the UK's achievement of this massive reduction in the incidence of BSE. The dream that we will eliminate it is still there. The fact that two months ago they were able to end the Over Thirty Months Scheme in relation to slaughter—and I take it that the noble Baroness, Lady Howarth, was merely referring to the Over Thirty Months Scheme in relation to inspection, which is still in place—will mean huge savings and that we are operating the same controls as the rest of Europe. These controls ensure that, as far as possible, there is no risk to consumers. That essential fact must be maintained. At the same time, I hope the Government will continue to address the finer details of rules and regulations to see whether further savings in cost and red tape can be made.
	I recently received a communication from the Scottish Association of Meat Wholesalers, one of those bodies that replied to the Government's consultation, and that paid particular attention to the EU TSE road map, which allows for future developments in our control and elimination of this disease. It raises the point that a possibility for alleviating cost lies in the fact that the present classification of specified risk material includes the whole intestine, whereas BSE has only been isolated in the distal ileum. It was found that if the SRM rules were directed only at this part of the intestine, it would save the European industry £77 million each year.
	Can the Minister tell the House how much research the Government are aware of as being carried out in this country? This is important if we wish to see the best progress within the EU road map?

Lord Greaves: My Lords, following the noble Baroness, Lady Byford, and other noble Lords, I thank the noble Countess, Lady Mar, for initiating this debate and laying this Motion to annul, which allows us to have this discussion this evening. This is a complex and difficult issue for lay people to get their minds around; nevertheless, it is a very important one. That has been indicated by the way, as the noble Duke said, it keeps coming back to be debated in this House.
	This is a calmer and less hectic occasion than the last time the noble Countess sought to annul a regulation. That took place during the ping-pong on the Animal Health Bill, when emotions were roused and the noble Countess was roundly accused of all sorts of things, maligned and, at one stage, accused of undermining the constitution of the very country by what she was trying to do. The country survived her attempts to do that, as has the noble Countess, and we are here to discuss it again.
	Before I turn to some of the issues raised, I want to thank and applaud the Government for some of the more positive aspects of these regulations. In its 22nd report of the current Session—it does beaver away—the Merits of Statutory Instruments Committee said that the regulations,
	"effect a welcome consolidation of a number of instruments dealing with controls to eradicate transmissible spongiform encephalopathies in cattle, sheep and goats".
	The consolidating aspect of these regulations is to be welcomed, as is what is described in one of the supporting memoranda in our briefing papers as an "innovative" approach by the Government in setting them out clearly and in a sensible way, which is easier to amend in future, and in writing them in plain English. I am not sure that everyone who reads them will understand them immediately; nevertheless, I believe that that has happened. It is interesting that, in using plain English in a sensible presentational layout, Defra is commended as being innovative. Perhaps it should lend some of its staff to other departments. At the moment, I am dealing with the Electoral Administration Bill, which is an absolute minefield of non-plain English and non-sensible layout.
	Also, as I understand it, these regulations have been condensed into 42 pages instead of the 221 pages of the 2002 regulations. That is surely not only a step forward but an indication to civil servants everywhere who draft these things that it is possible to say things more concisely without saying less. These things are to be welcomed, and they are not trivial because nowadays much legislation is a minefield of gobbledygook.
	When the House discussed the 2002 regulations, my noble friend Lord Livsey of Talgarth moved an amendment to the noble Countess's Motion and then the Minister, the noble Lord, Lord Whitty, moved an amendment to her Motion. It all got incredibly complicated and, apparently, constitutionally difficult. My noble friend would have liked to be here this evening but, unfortunately, he has been suffering from bronchitis and he is not quite as resilient as the noble Baroness, Lady Byford. The noble Baroness may be of a more resistant genotype than my noble friend; he apologises for not being here.
	I shall give the gist of what my noble friend said four years ago. First, he made a general complaint that, once again, this was making law by subordinate legislation in complex areas that would benefit from a more detailed approach. If we could subject a statutory instrument of this kind to a Grand Committee-type afternoon's discussion, that would be beneficial to everyone. Again—this is a general point—if we are reforming the procedure of the House, we have to find ways in which complex and difficult issues such as this can be better debated, rather than through a Motion like this on the Floor of the House. So I repeat the comments that my noble friend made four years ago.
	My noble friend also said—this has been echoed by a number of speakers this evening—that these regulations are rather over the top and gold-plated. In particular, I echo the comments of the noble Lord, Lord Hylton, about the powers of the inspectors. That is precisely the kind of thing that we should be able to scrutinise better and to which we should be able to persuade the Government to make changes, which is very difficult.
	My noble friend's amendment referred specifically to appeals, on which the position is better now than it was four years ago. I remember the ping-pong on appeals that occurred during the passage of the then Animal Health Bill. The noble Baroness, Lady Byford, and I managed to get some small improvements to the Bill at the bitter end of the ping-pong, and I think that there may be a better recognition of that kind of thing in these regulations.
	The final part of my noble friend's amendment dealt with what he referred to as,
	"the never-ending march of technology".
	A number of speakers have made that point this evening. Four years ago, the House passed a resolution, with the support of the Government, which called upon Her Majesty's Government,
	"to keep the regulations under review in the light of scientific and technological developments relating to TSE".—[Official Report, 15/5/02, cols. 382-83.]
	Underlying what a lot of people have said this evening is a belief that the Government have not really been doing that. Perhaps the Minister could tell us what changes have been made to the regulations and how they differ from the 2002 regulations in response to the Motion that the House agreed to at the time. What have the Government been doing to keep up with the never-ending march of technology and, in particular, to respond to the changes in science that have been taking place?
	I listened to the noble Countess, Lady Mar, in awe. The House is very—what is the word I am looking for? I am trying to compliment her, but I cannot think of the word. We really benefit a great deal from having her here to ask these questions. I do not know how much of what she says is right and how much is wrong; it is very difficult for a layperson to know such things. However, I know that she is asking a lot of the right questions, which I think deserve an answer.
	As far as TSE in sheep is concerned—and the whole business of genotypes, more susceptible strains and less susceptible strains—I think that we are back to the questions that concerned many of us a great deal when we were discussing Part 2, if I remember rightly, of the then Animal Health Bill. It is all very well breeding out certain genotypes in order to eliminate scrapie, if that can happen; it may be that it cannot happen and that new forms of scrapie will come that, because the other forms have been bred out, attack the other kinds of sheep. However, the real danger, which is quite clear to us all, is that in breeding out those genotypes you may also be breeding out the desirable characteristics of those genotypes, which have evolved over hundreds and thousands of years and which in future may not be there in response to a wholly different kind of attack on the sheep flock. That has been the concern about the Government's approach and, frankly, that concern remains. However, that is a more general thing, which does not necessarily affect these regulations immediately.
	On the top side, the noble Baroness, Lady Howarth, explained how huge progress, in my view, has been made in tackling BSE. I understand the points that she made, but we cannot avoid the fact that in 1992 there were 37,000 cases of BSE in this country, whereas now the number is down not quite to single figures but to double figures each year. It is 20 years since BSE was diagnosed, discovered, invented or whatever happened then. I believe that a good enough case has been made for the connection between BSE and Creutzfeldt-Jakob disease in human beings for us to take the action that we are taking. Even if the two have nothing to do with each other, eliminating BSE in cattle is worth while in itself. I believe that progress has been made in that area. We all look forward to the lifting of the restrictions on the slaughtering and sale of cattle, to which the noble Baroness referred.
	I welcome the regulations with two cheers, I think, in so far as I fully understand them. In particular, I welcome on behalf of these Benches the questions that the noble Countess raised and I very much look forward to hearing the Government's response.

Baroness Farrington of Ribbleton: My Lords, it may be helpful if I just inform the House that the fire alarm went off in the Barry Room kitchen. There is no cause for concern. Those of us who have a good sense of smell had smelt the fact that it had gone off.

Lord Bach: My Lords, I join in the thanks to the noble Countess for introducing this debate by way of a Motion to Annul. I am staggered by the expertise that there is—not, of course, just from the noble Countess, but from around the House—on what is, as the noble Lord, Lord Greaves, said, a very complex matter.
	Hearing about battles that were fought four years ago, I feel like a newcomer to a reunion party that noble Lords are holding tonight. I was the only person who was not part of those or even present—though I see I did vote on that occasion as I have looked in Hansard. I have not read every word of the debate as it went on for nearly three hours, if Hansard is correct.
	We recognise that TSEs are a public health issue and that variant Creutzfeldt-Jakob Disease is a truly terrible disease. I know that noble Lords would like, first of all, to pay tribute to the victims of the human variety and their families. BSE and scrapie are also, of course, very important animal health issues.
	These regulations revoke the TSE (England) Regulations 2002. They provide the necessary powers to administer and enforce the directly applicable requirements of the European Union Regulation 999/2001 which lays down the rules for the prevention, detection and eradication of TSEs.
	I hope that noble Lords will forgive me if I remind the House why we need these regulations. The EU regulation sets out the objectives for TSE monitoring, control and eradication. However, it does not always say how these objectives should be delivered or set out what should be done if individuals do not co-operate. That is what our national legislation does. The 2006 TSE regulations set out in detail how the requirements of the EU regulation will be delivered and provide the necessary powers to enforce them.
	I am grateful to the noble Lord, Lord Greaves, for referring to the Merits Committee, because if he had not I was going to do so. In their consideration of the regulations, committee members reported that the regulations,
	"effect a welcome consolidation of a number of instruments dealing with controls to eradicate TSEs",
	and were glad to hear of our claims that these regulations were written in clearer and more understandable English than some other regulations. The new regulations are much simpler and clearer than those they replace. Noble Lords will have noticed that they are also half the length.
	The new structure of the regulations divides them into common provisions and schedules covering the main areas of control for TSEs. This structure makes the regulations much easier to use and understand. They are largely a consolidation and updating of the existing provisions in this area. They are both reasonable and proportionate and are not gold-plated. However, they do introduce a number of limited changes and I have been asked by the House to deal with one or two of those.
	A common appeals procedure has been introduced, replacing the various appeals procedure that existed under the 2002 regulations. This was an issue which the noble Countess raised last time and it was of general interest to the House.
	Schedule 3 to the regulations includes a new table compensation system for cattle killed under BSE control and eradication measures. This table is in line with that introduced by the Cattle Compensation Order (England) 2006 and brings BSE compensation into line with Defra compensation arrangements for TB, brucellosis and EBL in cattle. Changes have also been made to the compensation rates for female sheep or goats and lambs or kids in Schedule 4, following a consultation in autumn 2005.
	The regulations also slightly amend the requirements for testing cattle aged over 30 months intended for human consumption. These requirements were originally introduced by the regulations of last year and are included in Schedule 2 to these regulations.
	A robust system of testing was set down as a prerequisite by the FSA before cattle aged over 30 months could enter the food chain. I was grateful for what the noble Baroness, Lady Howarth, said about that. Industry was consulted widely before the introduction of the controls. The evidence indicates that the controls are not discouraging abattoirs entering this market.
	The introduction of the OTM testing regime has led to a return of older beef to the food chain and is a very welcome boost in difficult times to the food industry and beef farmers. Farmers are generally receiving prices from the market that are well in excess of previous Over Thirty Months Scheme rates for their older cattle. It was encouraging too to hear what the noble Baroness, Lady Howarth, said about consumer attitudes to BSE.
	As I said previously, these provisions simply provide the powers and controls that are necessary to ensure that the directly applicable European legislation is enforced properly. A concern was raised on the previous occasion—four years ago—that the regulations gave inspectors the power to kill any TSE-susceptible animals. In revising the regulations, we have given regard to these concerns. The schedules clearly identify where the provisions apply to bovines, sheep or goats respectively.
	I turn to some of the questions that were raised. Some of the questions were detailed, quite understandably so, and I shall write a general letter to the noble Countess with answers to those questions which I do not answer in the next few minutes.
	A number of noble Lords, including the noble Countess, the noble Baroness, Lady Byford, and the noble Lords, Lord Hylton and Lord Greaves, referred to the qualifications of inspectors. Regulations are enforced by these inspectors, who are either from the State Veterinary Service—they are of course qualified veterinary surgeons—or the Meat Hygiene Service, which oversees abattoirs. They are either vets themselves or qualified meat technicians.
	I turn to powers. I know that the noble Baroness, Lady Byford, is very interested in this topic. We have met it in various Bills that we have debated at the Dispatch Box in this Session. I was referred in the course of debate to Regulation 17(1) relating to powers of entry. This rule represents no change from previous regulations. The regulation states that an inspector shall, on producing a document which shows his authority, have a right at all reasonable hours to enter any premises. These premises will include domestic premises provided that they are used for a purpose in connection with these regulations. If the domestic premises are outside the scope of these regulations, the inspector would be acting ultra vires unless he or she had obtained a warrant before entering.
	It is a strong power—I do not want to deny that. No warrant would be required if, for example, the office of the farm—if we are talking about a farm—was in the dwelling house. If it was not found there and it was not reasonable to expect that it might be found there, the inspector would be acting outside his powers. The powers are quite clearly laid down in Regulation 17. It is an example of the English used being more understandable.

The Countess of Mar: My Lords, there are two separate definitions of "inspector" in the regulations. The first refers to an inspector who is appointed under Regulation 16; the second refers to a veterinary inspector, which means a veterinary surgeon. Paragraph 18 refers presumably to what the Minister has just told us will be meat hygiene inspectors. Will these hygiene inspectors really carry out all these duties?

Lord Bach: My Lords, I am advised that they will. So I have dealt with inspectors as I intended.
	The EU regulation sets out the scope for TSE control and eradication action. Where it is necessary to kill animals for control purposes, the EU regulation specifies which animals must be killed. Our national regulations give us the power only to deliver these requirements. The detailed provisions in the schedules set out when the powers will be executed, but that does not mean that an inspector can require animals to be killed without good reason. Actions must be in accordance with the EU regulation and these regulations. Thus an inspector may exercise their powers only in the circumstances set out in the schedules and in the EU regulation. It is worth noting that the control measures set out in the EU regulation are currently being discussed within the context of the EU Commission's strategy document, The TSE Roadmap.
	Changes to controls are being considered in several areas to reflect the encouraging reduction in BSE cases across Europe. We are actively involved in this process. It supports the proposal that, in a case in which scrapie has been confirmed and BSE has been ruled out, it should not be necessary to cull the affected flock. The UK supports the proposed tolerance for acceptable trace residues of fishmeal in ruminant feed. This will alleviate significant problems which requirements for strictly dedicated production cause until the political issues of lifting the ban on fishmeal in ruminant feed are resolved in the European Parliament.
	The noble Countess, Lady Mar, is a distinguished contributor on these issues, but there is a difference of opinion about the origins of BSE. Indeed, it is accepted that the origins may never be known. But I draw the House's attention to the independent review carried out last year by Professor William Hill, who confirmed that the elimination of food-borne sources was a key to the eradication of BSE. He recommended risk-based controls, and that monitoring should be maintained on animals and feed.
	I shall return to answering some of the questions that have been asked today. The noble Countess mentioned what I believe is called the "one before and two after" rule. This is an EU rule, but I can announce that the Veterinary Laboratories Agency is carrying out a new risk assessment of this control. I hope that will give the House some satisfaction.
	The noble Countess expressed concern about goats. The EU regulation sets out the control measures that must be taken when scrapie is reported, and the provisions of the domestic regulations provide inspectors with powers to enforce them. We believe that the EU controls are disproportionate for cases of scrapie in goat herds that are dairy flocks, where animals are not sent for breeding. In such cases, we have applied controls pragmatically, restricting and monitoring affected herds rather than culling them. Other member states are carrying out similar actions in herds with confirmed cases of scrapie.
	The noble Countess, Lady Mar, and the noble Baroness, Lady Byford, talked about access for the Edinburgh scientists. I will answer that in the letter that I will write. The noble Baroness mentioned controls based on sound science. Controls are based on the best available science, and this is supported by the Government's independent experts—the Spongiform Encephalopathy Advisory Committee.
	The noble Baroness also asked why there was no differentiation of penalties in these regulations. Our answer is that the legislation does not impose the penalties on individuals; the courts do. The penalty provisions set only maxima; that is all they can do. The courts have—they must have—a wide discretion when dealing with an individual case. There is no inevitable lack of proportionality in any particular case.

Baroness Byford: My Lords, the whole question of fines that are being imposed particularly under Defra Bills has concerned me for several months. Many cases serve to produce evidence; they are not what I call life threatening, as some of the other instances are that come before the House for debate.
	In many cases we question this because the proportionality of some of the fines that could be imposed seem to us to be exceptionally high by comparison with other everyday examples, as I call them, that I could give. That is why we keep raising the issue. In some cases, where it is not considered urgent or imperative, it appears that the Government propose to bring forward very big ranges.

The Countess of Mar: My Lords, certain members of the Statutory Instruments Select Committee have expressed their unhappiness about the way in which the penalty legislation is being brought in through secondary legislation, with no debate. That is causing serious problems and people are very worried about it. Perhaps the Minister would reconsider that.

Lord Bach: My Lords, I take these points seriously. These are maximum sentences. The courts are very capable of dealing with the majority of cases that are not the worst and, therefore, do not attract the maximum sentence. I shall try to deal with that point also in the letter, as it is important.

The Duke of Montrose: My Lords, perhaps I can go back to the point the Minister was making about connections with the Edinburgh scrapie body. Do the Government accept that there are various different strains of scrapie and that they have slightly different characteristics?

Lord Bach: Yes, my Lords, we do. I shall continue with the questions. On compensation for pedigree cattle, I shall go back over the record and include the answer in my letter, as I shall with the detailed and proper questions that the noble Baroness asked about specific parts of the regulations. Why is there no compensation for a "no" test? I am advised that a "no" test is normally caused by poor sampling or poor processes and, as such, it is felt that taxpayers should not be liable for compensation for abattoirs' poor sampling.
	The noble Lord, Lord Hylton, raised some interesting points, not all of which I shall deal with tonight. On small abattoirs, at Defra we have limited funding for RDS grants and there is a large call on that funding, as the House would expect. The chairman of the Food Standards Agency has announced that she would like to see a review of abattoirs in sensitive areas. However, it is most important to ensure that all abattoirs meet controls that are put in place to protect public health. The call for the protection of small abattoirs has been noted.
	The noble Lord, Lord Hylton, also mentioned bovine TB. Everyone would agree that that represents a severe problem for all of us. I reminded him that the consultation on badger culling ends later this week, on Friday, so I am unable to comment at this stage. All responses will be considered in due course, and I hope noble Lords with an interest in this have written in. I do not want to say any more about bovine TB tonight.
	On avian flu, precautionary measures are in place and we consider them appropriate and sufficient for the time being. Exercise Hawthorn, to test the organisation, structures and systems in place in the event of an outbreak of AI, is planned for next month. We do not yet require birds to be housed and we shall continue to allow fairs, markets and racing to take place under licence. We believe that our refusal to panic is the right approach to this matter, but it means that we have to be ready if and when avian flu comes to this country. I believe we are ready.
	The noble Duke, the Duke of Montrose, mentioned research into specified risk material—SRM—in relation to testing. We are encouraged that the TSE road maps are based on science and are proportional.
	He asked about retaining a pool of genotypes. With industry, we have set up an archive of semen from rams of susceptible genotype under the national scrapie plan. That will make possible the establishment of viable breeding populations in sheep in future if that proves necessary.
	I hope that I have answered most of the questions, although I have not dealt with atypical scrapie. In general terms, we take account of advice from the Spongiform Encephalopathy Advisory Committee and EU scientific communities. What is the European Commission doing about atypical scrapie cases? In its TSE road map, which sets out future proposals for the control of TSEs in Europe, it acknowledged that the current control measures might not be appropriate in atypical scrapie cases and planned to review the policies during 2006. I say to the noble Countess, Lady Mar, that, to date, we do not believe that there is any evidence to indicate that atypical scrapie is, in fact, BSE. We consider that there is an urgent need, however, to gain a better understanding of the true significance of atypical scrapie, which must be based on sound scientific evidence.
	I have spoken for so long that the Deputy Chief Whip has come into the Chamber. I must wind up my speech. I have described the regulations as best I can. Let me mention the vote that will be held in all likelihood tomorrow morning in the EU's Standing Committee on the Food Chain and Animal Health on lifting the UK's export ban. Obviously, it would send the wrong message were we to annul the regulations tonight, thereby leaving us with no ability to administer and enforce the EU rules on BSE and scrapie, but the noble Countess, Lady Mar, has been good enough to tell the House that that is not her intention. I am sure that I speak for the whole House when I say that everyone hopes very much that the EU will vote to lift the export ban tomorrow, so that British beef will again be able to find its rightful place in Europe.

The Countess of Mar: My Lords, I am grateful to all noble Lords who have taken part in this debate. The noble Lord, Lord Greaves, said all the things that I should have said, but did not have time to say, about the nice aspects of the regulations and how they have been brought together. I am grateful to the noble Baroness, Lady Byford, and the noble Duke, the Duke of Montrose, for the questions that they posed, and I look forward to receiving the answers from the Minister. I also thank the noble Lord, Lord Hylton, for his support. Let me say to the noble Baroness, Lady Howarth, that I have never said that organophosphates caused BSE, but I said, and still say, that they might be a contributory factor, in that they affect the immune system.
	I have huge sympathy with any parents who have had to look after children with new variant CJD. I just want to know what is really at the bottom of these diseases, and that is why I keep questioning the science. When we look at the amount of money that has been spent on BSE and the huge measures that have been taken, and compare it with what has been done on TB, we see that there is a clear discrepancy on the research front. As to the wonderful meat hygiene inspectors, has anybody asked them whether they are prepared to do all these jobs? I just hope that they will never have to carry out these duties. With that, I thank the Minister for his contribution and for being so patient. I beg leave to withdraw the Motion.

Motion, by leave, withdrawn.
	House adjourned at six minutes before nine o'clock.

Tuesday, 7 March 2006.